Education is one of the most important investments that parents make for their children. However, the cost of school fees and related expenses can be a significant financial burden for families. To alleviate some of this financial pressure and to promote literacy, the government offers a tax deduction on tuition fees paid for children. In this article, we will explore the tax benefits offered on children's tuition fee, the eligibility criteria, and how to claim them.
The tax benefits offered on children's education are as follows:
The following exemption* is provided to a salaried taxpayer in India:
(*Only if expenses are incurred in India as per Section 10(14) of the income tax act)
A parent can claim a deduction on the actual amount paid as tuition fees to a university, college, school or any other educational institution. Other components of fees, like development fees and transport fees, are not eligible for deduction under Section 80C.
In a financial year, individuals can claim a maximum deduction of Rs 1.5 lakh for payments made towards tuition fees, along with deductions for items such as insurance, provident fund, pension, and others.
Persons paying any sum/fees towards the education of their children can claim tax deduction under Section 80C, subject to the satisfaction of certain conditions, which have been enumerated below:
Individual taxpayers can claim income tax exemption for children's education under Section 10(14) and tuition fees deduction under Section 80C.
For Salaried Individuals
Salaried individuals must submit the fee receipt issued by the schools or institutions to their employer by year end at the time of investment proof submission. They must also declare it in Form 12BB.
For Non-Salaried Individuals
A person who is not a salaried employee can claim only the tuition fee deduction under the VI-A schedule under Section 80C. The non-salaried taxpayers are not required to submit any bill while filing ITR. Nevertheless, they should keep the receipts as evidence to back their claims.
It is important to mention here that children's education allowance, which is part of the salary structure, and tuition fees are both different deductions. Therefore, these deductions can be claimed separately as per the limits discussed above.
Tax benefits are offered on children's education in India, with deductions for tuition fees and allowances like Children's Education Allowance and Hostel Expenditure Allowance. Eligibility criteria and claiming procedures for these tax benefits are outlined. Individuals can claim a maximum deduction of Rs 1.5 lakh for tuition fees per financial year per child. The deduction is available only for full-time education at institutions in India, with specific exclusions.