Section 80C is very widely known tax deduction section which allows tax benefits on various investments and expenses to an individual. Along with investments like PPF, LIC, ELSS, principal amount paid for home loan etc., one of the expenses that is eligible for tax deduction under section 80C is tuition fee.
According to section 80C, tuition fee that is paid towards full time education of your children to any university or colleges or educational intuitions in India will be eligible for tax deduction.
Please remember that tuition fee has to be paid to any university or colleges or educational institution situated in India. If you have paid to any university or colleges or educational institution which is situated outside India then that will not be allowed as tax deduction.
Even any kind of private tuition fee for your children’s education will not qualify for this tax deduction. Development fee or donation or capital fee or any other fee of similar nature will not be considered as tuition fee. Even fee paid for hostel, mess, laboratory and transport will not qualify for this deduction.
To get eligible, tuition fee must be paid for a full time course and it has to be claimed for any two children.
So, if you are paying any tuition fee for a part time or distance learning course then that is not eligible for tax deduction under section 80C even though the payments are to a university or college or educational institution in India.
Section 80C has specifically said that tax deduction can be claimed for any two children. So, one can claim tax deduction on tuition fee based on his or her wish i.e. if you have 4 children and you are paying tuition fee for all of them then consider two cases where you are paying higher amount and claim it as a tax deduction under section 80C.
If husband and wife are taxpayers and have more than two children for whom tuition fees are paid then both can claim tax deduction for any two children as convenient to them i.e. husband can claim up to two children and wife can claim up to two children but both cannot claim for the same child. So both of them has a separate limit of two children each by which they can claim tax deduction for 2 children each.
For example; if someone has four children then husband can claim for two and wife can claim for other two children.
As per the circular 9/2008, 8/2007, pre nursery school, play school, nursery classes will also be covered under section 80C and any tuition fee paid to them will be eligible for tax deduction.
Please remember, this tax deduction is only available in case of your children’s tuition fee. If any amount paid towards tuition fee for self or spouse then that will not be qualified for tax deduction under section 80C.
Limit of Tax deduction on Tuition fee – Section 80C
Tax deduction on tuition fee is available up to a maximum limit as prescribed in Section 80C of IT act i.e. Rs.100000. In addition to your eligible investments and expenses as prescribed in section 80C you can include tuition fee as an item in tax deduction list of section 80C.
Also read: Investments that are eligible for tax deduction under section 80C
If you do not have any other investments and expenses other than tuition fee then tax deduction can be claimed up to a maximum limit of Rs. 100000.
Rs. 100000 has been proposed to increase to Rs. 150000 in budget 2014. If budget 2014 passed in parliament then you can claim tax deduction under section 80C up to a maximum limit of Rs. 150000.
Please remember, you will be eligible for tax deduction only if tuition fee has been paid during the financial year. Fee may be related to any year, but, to get eligible it has to be paid during the financial year in which tax deduction is claimed.
How to avail tax deduction on tuition fee
In case of an employee, he or she has to submit photo copy of the receipts as a proof of tuition fee payments to employer and declare that amount in IT declaration submitted to the employer.
On submitting the receipts employer will consider it as a tax deduction under section 80C and will allow you to take tax benefits. In case you have not submitted and employer has deducted higher TDS without considering tuition fee as a tax deduction then you can claim the same while filling your IT return.
If you are a self employed person then tax deduction can be taken directly while filling your Income Tax Return at the end of the year.
In both the cases, tax payer is required to keep the original receipts with him or her to produce it before IT authorities in case asked for.
Note: Tax deduction on tuition fee is not available to a HUF