Deduction 80C of Tuition Fee: The government allows income tax deductions for education because education is a vital part of one’s life. Developing countries like India benefit from it by increasing literacy rates. There are lots of tax benefits available for Children’s Education Allowance, Tuition Fee Payment, and School Fee Payment. Taxpayers can deduct up to Rs. 1.5 lakh for school fee paid for their children’s education, under Section 80C of the Income Tax Act. In this article, we will discuss the complete detail about deduction of 80C of tuition fees including all amendments in the finance act 2023.
School Fee or Tuition Fee Deduction 80c
Under section 80C, you can claim a deduction for the payment of education fees for your children. There is a maximum deduction of Rs.1,50,000 for payments made during a financial year. There is a condition stating that the deduction under 80C for tuition fees and other investments like LIC, mutual funds, fixed deposits etc. is limited to Rs. 1,50,000 inclusive.
Any Parent can deduct tuition fees paid to educational institutions such as universities, colleges, schools, or other institutions as income tax deduction under section 80C.
There is no need to confuse school fees with tuition fees here. Any payment made to universities, colleges, schools, or other institutions eligible for income tax deductions, excluding development fees and transport fees.
Tuition Fee 80c Deduction Eligibility
Persons who wish to claim a tax deduction on tuition fees need to satisfy the following criteria.
- Only individuals can claim tax benefits, companies and HUF are eligible to claim deductions.
- Limit: The maximum amount of deduction under 80C is Rs 1.5 lakh per financial year for each parent. This limit is for aggregate deductions under 80C, 80CCD, and 80CCC.
- Two Children: The deduction of tuition can be availed only for two children per assessee i.e. if both parents are taxpayers then the deduction can claim for 4 children.
- Child Education only: Deduction is permitted only to the extent of tuition fees paid for educating the children of the taxpayer. Fees paid for anyone else are not allowed.
- Courses: The deduction can be claimed for the full-time courses only. These are school fees, fees for graduation post graduation i.e. fees of part-time courses are not allowed as a deduction.
- Affiliation: The school, college or university must have necessary affiliations and it must be situated in India.
- An adopted Child’s tuition fee is also eligible for deduction.
- Payment-based deduction: Deduction is allowed on actual payment of fee i.e. if the fee of March 2023 is paid in April 2023 then the deduction is allowed in FY 2023-24.
Expenditure not allowed as deduction u/s 80C
The following expenses are not eligible for deduction under section 80C but are related to education only:
- Payment of transport Charges
- Payment of Private Coaching Fees
- Late fees are not eligible for deduction
- Payment of fees paid outside India
- Hostel expenses, mess charges and library charges
- Development Fee or donation
- Payment of tuition fees of self, spouse, brother or sister, father or mother.
Important Points for School Fee 80C Deduction
- Individuals can deduct tuition fees paid to a university, college, school or other educational establishment in India for the purpose of educating two children (whether dependent or not).
- Under CBDT guidelines, full-time education includes courses offered by universities, colleges, schools and other educational institutions to students who are enrolled full-time.
- In addition to play-school activities, pre-nursery and nursery classes are all included in full-time education.
- This provision does not allow deductions for development fees, donations, or payments of a similar nature.
- Individual taxpayers can claim the deduction only for their own children, not for the children of other family members.
- Moreover, the school must be located in India, and the child must be enrolled in an accredited school.
- The taxpayer does not need to submit a receipt or invoice from the school as proof of payment with their income tax returns in order to claim this deduction. These receipts should be kept for future reference by the taxpayer
Deduction 80C of Tuition fee in New Tax Regime
In the Union Budget 2020, lower income tax rates are offered to taxpayers who are willing to give up certain deductions and exemptions. The deduction under Section 80C for tuition fees is not allowed under the new tax regime. Depending on their tax situation and preference, taxpayers can choose between the old and new tax regimes each year.
1 thought on “Deduction 80C of Tuition Fee (Updated 2023)”
Dear Arpit you are doing a commendable job, keep this good work going. you are making people aware about taxation. khudos to u.