Mukesh Patel.in
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TUITION FEES ELIGIBLE FOR TAX DEDUCTION

On a rational interpretation, tuition fees paid to your child’s coaching class should also qualify for deduction u/s. 80C!

So your children are back to school and college after the summer break? As you pay their tuition fees for the new term, do keep in mind that Section 80C of the Income-tax Act offers some attractive tax breaks for your children’s education too! The Q & A presentation hereunder discusses some interesting issues in this regard.

Query:  What expenditure for children’s education is eligible for deduction under Section 80C?

Reply:  Any payment as ‘tuition fees’ whether at the time of admission or thereafter, to any university, college, school or other educational institution situated within India, is eligible for deduction under Section 80C. Accordingly, any such expenditure, within the overall limit of deduction of Rs.1,00,000 under Section 80C, would now be eligible to be claimed and you can save Income-tax upto Rs.30,900 if you are in the maximum tax bracket.

 

Query:  Are there any restrictions or monetary ceilings applicable in regard to claiming this deduction?

Reply:  Section 80C clearly states that any payment towards any development fees or donation or payment of similar nature shall not be eligible for such deduction. Moreover, the payment of tuition fees should have been incurred for the purpose of full time education and only for any two children of an individual.


Query:  Is there any qualification in regard to who can claim this deduction, father or mother of the child?

Reply: This deduction under Section 80C can be availed in case of either or both of the parents of the children.  Keeping this in mind, it should be decided which of the two parents or whether both should pay the tuition fees during the year and in what proportion, to avail the maximum benefit of this deduction in both the cases.

 

Query: Can tuition fees paid for a child going to Play School or Nursery be claimed?  

Reply: ‘Tuition’ as defined by the Oxford’s Dictionary means ‘teaching or instruction.’  There can be no restriction regarding the age of the child or class of study, as long as the fees paid are in the nature of tuition fees.  There is no reason why a School should not include a Play School or a Nursery, which facilitate pre-school learning.  


Query: Can tuition fees paid to Coaching Classes for an HSC student be also claimed?

Reply:  Section 80C also refers to an educational institution, which would logically include a Coaching Class as well, where the student receives teaching or instruction.  In this context, the words ‘for the purpose of full time education’ under Section 80C must be rationally interpreted and accordingly in respect of a child who is pursuing full time education, payment of tuition fees to his School, as well as the Coaching Class (an educational institution), should very much qualify for deduction under Section 80C.


Query:  Many schools or institutions use various nomenclatures for Tuition Fees, such as Term Fees, Class Fees etc.  Can such Term Fees or Class Fees etc. be claimed as a deduction?

Reply:  What Section 80C discourages for purposes of deduction is the payment of any development fees or donation or payment of similar nature.  However, fees which are in nature of tuition fees, by whatever name called, can certainly be claimed as a deduction, keeping in view the legislative intent for granting the benefit.


Query:  Can a salaried employee receiving Children’s Education Allowance (CEA) and claiming it exempt under Section 10(14) of the I.T. Act, also claim separate deduction under Section 80C in respect of the tuition fees paid?

Reply:  The benefits of Section 10(14) and Section 80C are quite independent and hence there should be no bar in claiming both the benefits as prescribed.  You may also be in a position to logically argue that you are using the exempt CEA amount for meeting expenses of your children’s education, other than tuition fees, in respect of which you are not entitled to claim deduction under Section 80C.

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