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Tax Benefits on Tuition and School Fees

When we educate a child, we not only make him be able to read and write, but we give him an important tool that would help him shape up his present and his future. Imparting right education can help the child find the right path in life, trading on which he can one day conquer the world.

Sending the child to school is not just a responsibility but it also gives a sense of fulfilment to the parent that he is able to provide for his/her child. Education, after all, is the foundation for a comfortable and successful future. But with changing times, providing our children with a decent education is also a matter of concern. Day by day there is an increase in the cost of education. Forget about professional education, these days even pre-primary schooling can make a big hole in the pocket of the parents.

What many of us may not know is that paying the school fee can also have some other advantages for the parents. The Indian government keeps making policies and plans to promote education in all sections of society. A tax benefit also helps the country to move towards a higher rate of literacy. In today’s article, we will confer about the tax benefits on tuition and school fees.

Tax Deduction on Tuition Fees under Section 80C

Under the provision made under the Section 80C of the Income Tax Act, 1961, the parent can avail tax benefits on tuition and school fees, which includes schools, colleges, universities and any educational institute. The overall limit for a financial year is INR 1.5 lakhs. However, it should be carefully remembered that only the tuition fee out of the entire fee charged by the educational institute, is liable for a tax deduction. The other charges such as Transport Fees, Lab fee, Extra-Curricular Activity fee, Trips and Excursion Fee etc. are not accounted for. Section 80C states very clearly that only the amount of money that is paid as the tuition fee can be claimed at the end of the financial year. Also, this deduction can be asserted for 2 children who are dependent on the individual paying the taxes.

An example would help in understanding this concept better. Let us assume that Mr. Sameer pays an amount of INR 30,000 and INR 35,000 as the tuition fee for his two children who are aged 9 and 13 respectively. So, in all, he is spending INR 65,000 on the tuition fee. This amount is eligible for a tax benefit under Section 80C of the Income Tax Act, 1961.

Tuition Fees Eligibility for Tax Deduction under Section 80C

Here are the eligibility criteria that must be met by the individual if he has to avail the tax benefits on tuition and school fees.

Individual Assessee

HUF or corporates cannot file for claims. Only the individual assessee who are the taxpayers can avail the tax benefits.

Deduction Limit

The limit that is permitted for deduction under Section 80C of the Income Tax Act, 1961 is INR 1.5 lakh each financial year. In case, both parents are paying taxes then up to four children ’s tuition fee can also be claimed.

Only for Child’s Education

The taxpayer can avail a tax benefit only for his own or for his adopted children. The tax benefits on tuition and school fees are not available for self or spouse.

Affiliation

All registered universities, colleges, schools or other educational institutions qualify for tax benefits on tuition and school fees.

Kind of Education

Only full-time courses and programmes are considered for the benefit, Part-Time courses are not.

Payments Not Eligible for Tax Deduction

In the case of the following conditions, there is no tax benefit:

  • The fee that is paid as a donation or a charity to the school
  • The building fund is not tax-free
  • The fee that is paid as a private coaching centre fee, home tutor’s fee
  • The other fee charges such as Transport Fees, Lab fee, Extra-Curricular Activity fee, Trips and Excursion Fee etc. are not accounted for.
  • There is no provision of claiming the fee that is being paid in a foreign country for a course be it full or part-time
  • The tax benefits on tuition and school fees are not available for spouse, siblings, parents or any other relatives.
  • Distance Education Courses also doesn’t get any tax benefit.
  • If due to late fee deposit there is a fine being charged, it would not be eligible for a tax benefit.
  • The fee that is paid as a Term Fee

Tax Deduction on Tuition Fees under Section 10

Apart from Section 80C, the taxpayer can also get some tax benefits on tuition and school fees under Section 10 of the Income Tax Act, 1961. With this provision, the salaried taxpayer can save on the taxes that he has to pay to the tune of INR 100 every month per child. This facility is, however, only applicable for two children, which comes to INR 200 every month. It should be remembered that the claim has to be made in the same financial year when the fees were paid. Other than this, the taxpayer can also claim an exemption of INR 300 for each child on the hostel costs.

How to Claim tax benefits on tuition and school fees?

The process to claim tax benefits on tuition and school fees are quite simple and easy and can be done in a hassle-free and smooth manner. The taxpayer simply needs to file a tax return when all the taxes that are due have been paid off.

If the taxpayer is filing his tax returns online he can make use of the ITR tool called the tax refund calculator. These calculators are very easy to work on and are self-explanatory. There is some paperwork to be done, but there is no need to get worked up because that too is very easily done. When making a claim it is necessary that all the documents, receipts and bills are carefully kept. The taxpayer must ensure that he has the fee-booklets, college fees and hostel fee receipts with him. Once the return is filed, after verification from the Income Tax Department, the return amount will be transferred to his account.

Conclusion

The facility to claim tax benefits on tuition and school fees is a big boon given by the government to all salaried employees and must be availed wisely. The limit for availing tax-benefits is INR 1.5 lakhs, once you save taxes on the child’s tuition fee you may also plan to invest in some long-term policies.

Frequently Asked Questions

I have three children; can I get a tax benefit on their education?

This deduction can be asserted only for 2 children who are dependent on the individual paying the taxes. In case, both parents are paying taxes the third child’s tuition fee can also be claimed. Nevertheless, if you alone are earning, you can make a claim for two children but not for the third one.

My child is in Kindergarten, can the fee be claimed for?

Yes, if the school is charging any tuition fee, then it can certainly be claimed.

If the child is studying in a foreign country, can I claim his fees here in India?

No, there is no provision of claiming the fee that is being paid in a foreign country.

Can the fee be claimed if the child is adopted?

Yes, the benefits can be claimed. However, there is the condition that the deduction can be asserted for 2 children who are dependent on the individual paying the taxes.

Who is eligible to get tax benefits on tuition and school fees under Section 80C?

The tax benefits are eligible for the individual who is being assessed. This provision is not accessible to the HUF, Hindu Undivided Family.

My daughter’s school also charges a transportation fee, can I claim that?

No, you cannot claim that. It should be carefully remembered that only the tuition fee out of the entire fee charged by the educational institute, is liable for a tax deduction. The other charges such as Transport Fees, Lab fee, Extra-Curricular Activity fee, Trips and Excursion Fee etc. are not accounted for.

My wife is enrolled in a government recognised university for a Master’s Degree, can I claim the tuition fee being paid there?

No, the tax benefits on tuition and school fees are not available for the spouse.

After school, my son takes private tuition lessons from a home tutor, can I claim this fee?

The tax benefits on tuition and school fees that are made towards a government recognised institute only can be enjoyed. So, private tuitions, coaching classes, etc. are not covered.

I am a taxpayer. To pursue higher studies, I have enrolled myself in a full-time course of 2 months. Can I get a tax benefit?

No, the tax benefits on tuition and school fees are not available for self.

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