TUITION/ SCHOOL / EDUCATION FEES - DEDUCTION U/S. 80C (income tax matters) Who is Eligible? Deduction for tuition fees u/s. 80c of the Income Tax Act1961 is available to Individual Assessee and is not available to HUF. Maximum Child: Deduction under this section is available for tuition fees paid on two children’s education. If Assessee have more then two children then he can claim tuition fees paid of only two children’s. The Deduction is available for any two children. Here we would like to mention that husband and wife both have a separate limit of two children each, so they can claim deduction for 2 children each. Expenditure paid for self education not allowable: This is the only clause u/s 80 C where assessee can not claim tax benefit for expenditure incurred for self. In other words if assessee has paid tuition fees for his own studies, he will not be eligible for deduction. Fees paid for spouse: Deduction is not available for tuition fees paid for studies of spouse. Maximum Limit: Deduction for tuition Fees is available up to Rs.100000. Please Note that aggregate amount of deduction under section 80C , 80CCC and 80CCD shall not exceed Rs. 1,00,000/- Deduction available on payment basis: Deduction under this section is available on payment basis. Fees may be related to any period. For example feed paid for April 2009 if Paid in March 2009 will be eligible for deduction u/s. 80C in A.Y. 2009-10. Deduction not available for part time course: The deduction is available for Full Time courses only. In our opinion no deduction is available for part time or distance learning courses. Fees for Private tuition/Coaching Classes not eligible for deduction u/s. 80C: The fees should be paid to university, college, school or other educational institution. No deduction available for fees paid for private tuition’s , coaching courses for admission in professional courses or any other type of courses are not covered as that fee is not paid for FULL time education. Location of University, college, school or other educational institution: University, college, school or other educational institution must be situated in India though it can be affiliated to any foreign institutes. Allowability of pre-nursery, play school and nursery class fees: Pre-nursery, play school and nursery class fees is also covered under section 80C (circular 9/2008 & 8/2007). Not allowable Expenses:- 1. Development fees or donation not eligible. 2. Transport charges, hostel charges, Mess charges, library fees, scooter/cycle/car stand charges incurred for education are not allowed. 3. Late fees is not eligible for deduction. 4. Term Fees is not eligible for deduction. 5. No deduction for part time or distance learning courses. 6. no rebate for private tuition. 7. Building fund or any donation etc not allowed. Note: Above list is not exhaustive. Summary of Above Provisions 1) Deduction from taxable income under Section 80C is available to individual taxpayers up to a maximum amount of Rs1 lakh for education expenses incurred for one’s children. 2) Each parent can claim the deduction for the tuition fees paid for up to two children each, thereby covering a maximum of four children in a family. 3) This deduction is available to the parent who has made the payment, to the extent of the tuition fee actually paid or Rs1 lakh, whichever is lower. 4) The deduction can be claimed only for full-time courses including pre-nursery and playschool. Part-time, distance learning courses, private tuitions and coaching classes are not covered. 5) This deduction can be availed of on the basis of actual payment made, irrespective of the period to which the fee may pertain. 6) Only the tuition fee paid is eligible for deduction. Other expenses, such as transport charges, library charges, hostel charges, development fees or donation, are not covered. CA. JEESON. C.S, B.COM, F.C.A, D.I.S.A.(I.C.A.I), P.G.D.P.R.M JEESON AND COMPANY CHARTERED ACCOUNTANTS ========================== SECOND FLOOR, U BROTHERS BUILDINGS GURUVAYOOR ROAD, KUNNAMKULAM THRISSUR DISTRICT, KERALA – 680 503 jeeson.ca
Posted on: Sat, 13 Jul 2013 16:29:19 +0000
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