Children's Education Allowance, Tuition Fees and School Fees

Education is one of the most significant investments parents can make for their children. However, the cost of school tuition and other associated expenditures can be a considerable financial strain for families.

To ease some of the financial strain and promote literacy, the government provides a tax break for tuition fees paid for children. In this post, we will look at the tax benefits available for children’s tuition fees, as well as the eligibility conditions and how to claim them.

The following are the tax advantages associated with children’s education:

Children’s Education Allowance
Hostel Expenditure Allowance
Tax deduction on tuition fees

Exemption from Hostel and Education Costs for Children

In India, an employee is entitled to the following exemption*:

Children’s Education Allowance: Up to two children maximum, each child receives INR 100 per month.
Monthly allowance for hostel expenses: INR 300 for each child, up to a maximum of two children.

(*Only if costs are incurred in India by Income Tax Act Section 10(14))

Section 80C deduction for tuition fees

Any parent who has paid genuine tuition to a university, college, school, or other educational establishment may deduct that amount from their taxes. Section 80C does not allow for the deduction of other expenses, such as construction and transportation fees.
A person’s tuition costs can be deducted up to Rs 1.5 lakh in a financial year, in addition to deductions for insurance, provident fund, pension, and other goods.

Section 80C: Eligibility for Tuition Fee Deduction

If a person meets the requirements listed below, they may be eligible for a tax deduction under Section 80C for whatever amount they contribute towards their children’s education.

Who is eligible: Only parents are permitted to claim this deduction. The educational costs of an adopted kid are also deductable.
Number of Children: For a maximum of two children each parent may deduct up to Rs 1.5 lakh. For a total of four children, if both parents file taxes, they are eligible to claim deductions.
The maximum amount is Rs 1.50 lakh for each fiscal year.
Please be aware that a taxpayer’s total deduction under Sections 80C, 80CCC, and 80CCD is limited to Rs 1,50,000.
Maximum Age: There isn’t one.
Meaning of tuition fee: The only amount paid for the child’s full-time education. All of these contributions, nevertheless, will not be
considered tuition: Development fees, charitable contributions, private coaching fees, and other costs like dorm, mess, library, or similar expenditures.
Establishment: Any Indian university, college, school, or other educational establishment.
Method of Inference: Only actual payment is eligible for the deduction; payable basis is not. For example, if the parent pays the fee in April 2024 for the quarter that ends in March 2024, the payment made will be deductible in FY 2024–2025.

Section 80C: Ineligibility for Tuition Fee Deduction

It is not possible to use the deduction to pay for part-time courses.
The deduction cannot be used to cover the cost of education for the individual, their spouse, their brother or sister, their mother or father, or any other relative.
The deduction of fees for a foreign university located outside of India is not applicable.

How Do I Claim a Tax Exemption for Children’s Education Allowance and Tuition Fee Deduction?

Individual taxpayers can claim an income tax exemption for their children’s education under Section 10(14), as well as a tuition deduction under Section 80c.

For Salaried Individuals

Salaried persons must present the fee receipt given by the colleges or institutions to their employer at the end of the year, at the time of investment proof filing. They must also declare it on Form 12BB.

For Non-Salaried Individuals

A person who is not a salaried employee can only claim the tuition fee deduction under the VI-A schedule of Section 80C. Non-salaried taxpayers are not obliged to provide a bill while submitting ITR. Nonetheless, they should maintain the receipts to support their claims.

It is vital to note that the children’s education allowance, which is part of the wage structure, and tuition expenses are two separate deductions. As a result, these deductions can be claimed independently, subject to the limitations indicated above.