Simplified Laws Guide to Taxation and Legal Concern Introduction: Section 80C of the Income Tax Act allows certain investments in many small savings like NSC, PPF, Pension plans and certain expenditure like payment of tuition fees, life insurance premiums, and payment of principal amount of home loan to be tax exempt. The aggregate amount of deduction permissible under 80C is Rs. 1 lakh.
This article explains in a detailed manner regarding deduction available for payment of tuition fees under Section 80C.
Extract from the Act: The relevant part of the Section 80c of the Income Tax Act, 1961 is reproduced hereunder:
Clause (xvii): Any sums paid or deposited in the previous year by the assesseas tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter,
(a) to any university, college, school or other educational institution situated within India;
(b) for the purpose of full-time education of any of the persons specified in sub-section (4);
Sub-section (4) – for the purposes of clause (xvii) of that sub-section, in the case of an individual, any two children of such individual.
Issues commonly asked by the taxpayers:
1. Whether tuition fee paid to kinder garden is eligible for tax benefit?
Pre-nursery, play school and nursery class fees is also covered under section 80C (circular 9/2008 & 8/2007). Hence tuition fee paid to kinder garden is eligible for tax benefit.
2. My son is studying post graduation [MCA] in Bangalore University. Can I claim the tuition fee paid u/s 80C
The deduction would be allowed only if the course is full time. Secondly only the tuition fees would be allowed and no other fees such as development fees or admission fees would be allowed.
3. I have two kids. Can I claim the tuition fee paid for both the kids under this section?
Yes. The deduction is available for a tuition fees paid on two children’s education.
4. My daughter is doing a week end course in animation in a private training institute. Whether the course fee paid by her eligible for tax exemption?
No. The deduction is available only for the full time education situated in India. Also the deduction is available only for the fees paid to university, college or other educational institution. No deduction is available for fees paid to the private training institute.
5. My son is studying is MS in USA. Can I claim the course fee paid?
No. The deduction is available only for the university, college, school or other educational institution situated within India though it can be affiliated to any foreign institutes.
6. I am doing post-graduation course in IGNOU. Can I take the benefit for the tuition fee paid for the course?
No. The deduction is available for full time education only. In our opinion no deduction is available for part time or distance learning courses.
7. If a couple have four children, can they both claim fees for two children each?
Yes, husband and wife both have a separate limit of two children each ,so they can claim deduction for 2 children each.
8. If a Couple has one child and paid a fees of Rs. 200000 can they both claim tuition fess 100000 each?
Yes ,they both can claim deduction for 100000 each subject to they have actually paid same amount .If husband has paid 1.50lac and wife has paid 50000 then husband can claim 100000 and wife can claim 50000.
9. I paid tuition fees for my child 2000/- in January 2014 relate to period March to June 2014, how much amount I can claim deduction in an assessment year 2014-15?
You can claim full 2000/- in assessment year 2014-15 , as this deduction is available on the basis of payment and it may or may not be related to the period in which it has been paid.
