Claim Tax on Children’s Tuition Fees
Taking care of India’s literacy rate also the education of children, there are some number of tax benefits that a person can claim for their taxable income. The Indian government allows tax breaks & income tax exemption on the tuition fees paid by the individual for their child/children. Let’s talk more how to save tax on children’s tuition fees. Here:
Exemption for Children’s Education & Hostel Expenditure
- Education Allowance: INR 100/month, per child upto a maximum of 2 children.
- Hostel Expenditure Allowance: INR 300/month, per child upto a maximum of 2 children.
(*exemption provided to an individual who is employed in India)
Deduction of Payment towards Tuition Fees (under Section 80C)
A parent can claim a deduction on the amount paid as tuition fees to a college, school, university or any educational institution. Other components of fees like transport fees, and development fees are not eligible for deduction(s) under Section 80C.
Also, the maximum deduction on payments made towards tuition fees can be claimed upto INR 1.5 lakh all-together with the deduction with respect to provident fund, pension, insurance, etc. in a financial year.
Eligibility of Tuition Fees for Claiming Deductions
We have enumerated as below:
- Who is Eligible: The deduction is available only to an individual parent/guardian/sponsor.
- How many Children: To a maximum of 2 children for each individual. Thus, a maximum of 4 children can be easily claimed which means – 2 by each parent.
- Limit: The maximum limit that can be claimed by an individual is INR 1.50 lakh separately every financial year. Make sure it should not exceed the limit.
- The deduction is available only for full-time education courses that include – play school, creches, and nursery school.
- The deduction is available on actual payment, not on a payable basis.
- The fee can also be claimed by a divorced parent/unmarried person.
- Fees are also eligible for an adopted child.
- Deduction is available irrespective of the class attended by the child/children. Although, college, university or the institution must be situated in India; even it is affiliated to a foreign university.
Non-eligibility pf Payments towards Tuition Fees
- The deduction is not available for part-time courses.
- Payment made towards donation, charity, development fees, mess charges, private coaching, hostel charges, or library charges are not available for deduction.
- Fees paid to a foreign university are not eligible for the deduction.
- The deduction is not available towards payment made for school fees of spouse, sister, brother, mother, father, or self.
How to Claim Tax-exemption?
All you need to do is submit the receipt issued by schools for the payment made during the financial year (to their employer). Also, you need to show it in ‘form 12BB’ before submitting the investment proofs at the end of the financial year.
For an individual (other than a salaried employee), you’ll have to claim the deduction under ‘VI-A’ schedule by showing the fees paid under Section 80C.
If not in a favor of claiming tax through tuition fees, you can also consider ELSS funds or index funds for the long-run. Still not sure? Get in touch with the experts of Gulaq & let them help you out in figuring out the best solution.
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