Tax Saving on Tuition Fees & Children Education Allowance: U/S 80C & 10
Tax Saving on Tuition Fees & Children Education Allowance: U/S 80C & 10
Tax saving means you pay a reduced amount of taxes, either because a particular type of income is taxed at a low rate or not at all or only a portion of the income is taxable. Every person wants to maximize his tax saving. In this article we will discuss, how you can save tax on children education allowance, children hostel allowance and tuition fees/school fees.
Children Education Allowance Tax Benefit u/s Sec 10(14): If any allowance is given by employer to its employee as education allowance for the education of his children in India, it shall be exempted upto Rs.100 p.m. per child for maximum two children only. Exemption shall be allowed irrespective of the actual expenditure incurred by the employee on the education of the children.
Hostel Expenditure Allowance Tax Benefit u/s Sec 10(14): If any allowance is given by employer to meet the hostel expenditure of employee’s children, it shall be exempted upto Rs.300 p.m. per child for maximum two children only.
Tuition Fees Deduction u/s 80C: Any amount paid as tuition fees, whether at the time of admission or thereafter to any school, college, university or other educational institution situated in India, for the purpose of full time education of any two children of the individual, will qualify for deduction u/s 80C.
Here are the key points for claiming deduction u/s 80 for the payment of tuition fees:
Only individual can claim deduction u/s 80C for the payment of children education fees.
Deduction for payment of tuition fees is allowed for maximum two children only for each parent. Both husband and wife have a separate limit of two children each. Therefore family can claim deduction for the payment of fees of maximum four children.
Tuition Fees paid for the study of self or spouse is not allowed as deduction.
Maximum amount of deduction for tuition fees is Rs.150000 for each parent separately for each financial year.
Deduction is allowed irrespective of the class attended by the child.
Deduction will be allowed on payment basis only. It will be allowed in the year in which fees has been actually paid.
Deduction is allowed for the payment of fees for full time courses only. Therefore fees paid for part time courses can not be claimed as deduction u/s 80C.
Deduction is allowed for the payment of tuition fees to affiliated school, college, university or other education institution.
Payment made for private coaching/ coaching center is not allowed as deduction.
The deduction is allowed for the payment of fees for education in India only. However, fees paid to any institution located in India, which is affiliated to foreign university, will be allowed as deduction.
Fees paid to a Play School or Creche or any other school for Pre-Nursery/Nursery education is allowed as deduction.
The deduction can also be claimed for adopted child.
The deduction can be claimed by unmarried/divorced parent.
Payment like development fees, donations, building fund, transport charges, hostel charges, mess charges, library fees, late fees, fine and other similar expenses are not allowed as deduction.
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