With financial year 2017-18 coming to end in couple of months, many people would be grappling with avenues that can help them in reducing their tax liability. While you may consider different investment avenues to save taxes, instead of making new investments, it is prudent to first look at the incurred expenses that can help you bring down the taxable income. One such expense could be the tuition fees paid to education institutions for your children’s education. Read how and when you can claim the deduction against tuition fee.
Every individual taxpayer can claim tax deduction for tuition fees under section 80C of the Income-tax Act, 1961. However, this deduction is not available to Hindu Undivided Family (HUF) assessees. Deduction can be claimed within the overall limit of section 80C, which is Rs1.5 lakh for the assessment year 2018-19.
There are other avenues too that qualify for deduction under the same section, such as: contributions to Employees’ Provident Fund, life insurance premium, and Public Provident Fund.
It must be noted that each income tax assessee can claim this deduction for two children only. What this means is that if a couple has more than two children, each parent can claim the deduction for tuition fees of up to two children each.
This deduction is available only for full-time courses and for fees paid to a recognized university, college, school or other educational institution in India. All tuition fees paid during pre-nursery, play school and nursery class are also included.
No deduction is available for fees paid for private or home tuition, coaching courses for admission in professional courses, part-time courses and distance learning courses. Also, there is no rebate on the other charges paid to schools or colleges, such as: late fees, development fees, transport charges, hostel charges, mess charges, library fees, scooter/cycle/car stand charges incurred for education, term fees, building fund, and donation or capitation fee.
Deduction cannot be claimed for tuition fees paid to foreign universities situated outside India. Also, tuition fee paid for self or spouse or other dependents, other than children, is not deductable.
To claim the deduction, you should submit payment receipts to your employer. However, if you fail to submit the receipts, you can also claim the deduction while filing your income tax return.
Look for other tax-saving investment avenues, only if you are still left with scope to save taxes after taking into account all such expenses that help you bring down the taxable income.