written by | May 17, 2022

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Tax Benefits on Tuition Fees and Education Fees

As per section 80C of the Income Tax Act, parents providing tuition or education fees for their children have the provision for tax deductions. Every taxpayer can avail of tax deductions up to ₹1.5 lakhs under the provisions made by section 80C. Taxpayers can claim benefits for their two children, and the tuition fee tax exemption covers your child's undergraduate degree, registration charges, tuition, examinations and supervision. The rebate tuition fee in income tax return also finances study equipment, laptop accessibility, library memberships etc.

In this article, we will learn in detail about the provisions of the tuition fee deduction under section 80C. Salaried individuals can fill out the form 12BB to avail their tuition fee tax exemption. For self-employed or non-salaried employees, Section 6 of the Income Tax Return offers the same benefits. If you have proof of the paid tuition fees for the entire year, you can easily claim tax deductions. 

The tax benefits are limited to only the actual amount paid. The tuition fees deduction under section 80C doesn't allow tax benefits on additional costs like hostel expenses, accommodation, transport charges, private coaching, etc. Read a comprehensive guide on rebate tuition fees in the income tax return below.

Did you know?

The maximum limit accessible under section 80C is ₹1.5 lakhs with up to 2 children for employees on a salary basis.

Also Read: Standard Deduction for Salaried Individuals

Tax Benefits on Education Fees and Tuition Fees under 80C

The Indian government provided tax benefits for tuition and education fees. A taxpayer can avail of a deduction of ₹1.5 lakhs. The government has set various eligibility criteria for several payments and certain non-eligible payments. A taxpayer is eligible to claim tax benefits for a maximum of two children. However, if a couple has four children, they can separately claim tax benefits for their children since the individual limit is set for two children. The tax benefit is given to the parent who makes the payment. Suppose both the parents are working and the tuition fee for your child is ₹2 lakhs. If you pay ₹1.5 lakhs and your partner pays the other half, you can claim the tax benefit separately for the total payment.

The tuition fee deduction under 80C was a provision by the Indian government to encourage education. With the higher education fees rising, the parents are required to have sufficient funds and provide the best education for their children. To keep the financial restrictions at the minimum, special provisions for taxpayers under tuition fee tax exemption were made. The Income Tax Act provides exemptions to individuals to save taxes and provide good education to their children.

Tax Deduction on Tuition Fees under Section 80C

Tuition fee deduction in income tax is a provision for parents to claim tax deductions on education fees paid by them for educating their wards. A maximum of ₹1.5 lakhs can be claimed for a tax deduction by one parent, and this claim also involves some other investments. In case of the need for additional tax saving methods, parents can claim tuition fees under 80C to make sure they save their taxes.

Let's take an example to understand. Suppose Mr James is a salaried employee and has two children. He pays a yearly tuition fee of ₹50,000 for his son and ₹15,000 for his daughter. The total tuition fee spent by Mr James is ₹65,000 annually. So, he can claim this payment as a tuition fee deduction in income tax. This provision will help him save his taxes and have a considerable amount to claim in taxes. For example, if you want to claim deductions on the fees you paid in March 2022, you will have to claim the tax benefits in April 2022. You can file the tuition fee tax exemption for the financial year 2022-2023.

The Eligibility of Tuition Fee Deduction in Income Tax

There is a set criterion for every taxpayer to be eligible for tuition fee deduction under section 80C. The individual should successfully fulfil the conditions given below to claim tuition fees under 80C.

Amount Limit

The taxpayer can claim tuition fee tax exemption for the maximum limit of ₹1.5 lakhs for two children in one financial year. If both the parents are salaried employees, they can claim tax deductions under 80C for four children. The limit for one person to claim tuition fees under 80C is not more than two children.

Education for Children Only

You can claim tuition fees under 80C only for educating your children. Any expense towards self-education or the education of a family member or spouse does not count under 80C.

Courses

If your child is enrolled in a full-time course, you can only claim a tuition fee deduction in income tax. The tax exemptions involve school fees, graduation or post-graduation expenses, and any payment or fee paid for part-time courses is not eligible for tax deductions.

Location

The taxpayer cannot claim deductions for an educational institute located outside of India. The tuition fees under 80C apply to institutions with affiliations with international universities or national campuses of institutions outside India.

Single Parents

As a single parent or a legal guardian, you can claim tax deductions for your children. Tuition fees deduction under section 80C applies to non-biological parents who are legal guardians.

Affiliations

The educational institution under which you claim tax benefits should have all the necessary affiliations for your tuition fee tax exemption to be valid.

Also Read: Exempt Income Under Section 10 of Income Tax

The Payments Not Eligible for Tuition Fee Deduction in Income Tax

Your child's education does not only depend on school or college fees. There are several components involved in the education like tuition fees, book and material expenses, uniforms, registration fees etc. Several institutions charge additional costs like donations, one-on-one coaching, etc. These added costs cannot be claimed under section 80C of the Income Tax Act. A taxpayer cannot claim tax benefits for commute, accommodation costs or distance learning courses. The tuition fee tax exemption can be claimed only on the amount of actual fees paid to the institution annually. These are some of the expenses that are excluded from the tax benefits.

  • Admission fees
  • Extra-curricular activities expense
  • Private Coaching
  • Donations
  • Stationary Expenses
  • Accommodation
  • Commute

Tuition Fee Tax Exemption under Section 10

To save a sizeable portion of their tax, Section 10 of the Income Tax Act provides an additional instrument. This section states that salaried employees can save tax up to ₹100 per child every month. Similar to the tuition fees under 80C, this claim can be made for up to 2 children, and this accounts for one parent to be eligible for tax benefits of ₹200 every month. You can claim this amount in the same financial year you pay the fees. Unlike tuition fees under 80C, you can get tax benefits on hostel expenses, which are set at ₹300 per month for every child, in the case of 2 children.

Conclusion

Education is said to be the most powerful asset in the growth of any individual. However, in the fast-paced world, the cost of education rises by the second, and parents are under constant pressure to provide their children with the best education. To save the parents a sizeable tax, the government introduced tuition fees deduction under section 80C.

Salaried individuals can fill out the form 12BB to avail their tuition fee tax exemption. For self-employed or non-salaried employees, Section 6 of the Income Tax Return offers the same benefits. If you have proof of the paid tuition fees for the entire year, you can easily claim tax deductions. We hope this article helped you understand how you can claim deductions for tuition fees and saves a sizeable amount of tax.
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FAQs

Q: Can a taxpayer with three children claim tuition fees under 80C?

Ans:

However, both parents should be taxpayers. If only one parent is a taxpayer, you can only avail of deductions for two children.

Q: Can I claim a deduction for a child studying outside India?

Ans:

The tax benefits are only applicable if the institute is located in India. Internationally affiliated institutes with a local campus are included.

Q: Can you claim a tuition fee deduction in income tax for an adopted child?

Ans:

Yes, any legal guardian of a child can claim tax benefits under the condition that you cannot claim deductions for more than two children.

Q: When can you claim tuition fee deduction under section 80C?

Ans:

As a taxpayer, you can claim tax benefits when you pay the school fees in the same financial year. The deduction, however, can be claimed only on the actual amount paid.

Q: What is the exemption limit for tuition fee deduction in income tax?

Ans:

The maximum limit for the tax benefits is 1.5 lakhs in a financial year. This claim includes all other investments for tuition fee tax exemption.

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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.