Allowances for Children’s Education and Hostel Expenditure
As per Section 10(14) of the Income Tax Act 1961, special allowances are given to salaried individuals to cover their children's education and hostel expenses.
- Children’s Educational Allowance: An allowance of INR 100 per month is allowed per child for up to two children studying in an educational institution.
- Hostel Expenditure Allowance: An allowance of INR 300 per month per child for up to two children is given to those staying in hostels.
Note: You can claim this allowance only in the financial year the quoted Educational Fee was paid.
*The given allowance is provided to a person employed in India only.
** The allowance is provided only when expenses are incurred within India in accordance to Section 10(14) of the Income Tax Act 1961.
***The Allowances are subject to change as per any future Income Tax Act, 1961 amendments.
Types of Fee Reimbursable Under Section 10(14)
The types of Fee that are eligible for reimbursement are:-
- Tuition Fee
- Admission Fee
- Special Fees charged for agriculture, electronics, music, or any other subject
- Fee charged for practical work under the program of work experience
- The fee is paid for using any appliances or any form of aid.
Eligibility for Tuition Fee Tax Deduction under Section 80C
Tax-paying individuals who wish to claim a Tax deduction on Tuition Fees under Section 80C must satisfy the conditions for eligibility given below:-
- Individual Assesses only: This Tax deduction can only be claimed by individual assesses and not by HUF(Hindu Undivided Family) or Corporates.
- Limit: The maximum permissible limit under Section 80C of the Income Tax Act 1961 is Rs.1.5 lakh with deductions eligible only for two children per assessee. If both parents are taxpayers, they can claim a tax deduction for up to 4 children. Otherwise, an individual assessee cannot claim for more than two children.
- Child Education Only: Tax Deduction can be claimed towards educating the children exclusively. The fee paid towards educating anyone else, including spouses and the person themselves, cannot be claimed as deduction.
- Full-Time Courses Only: Tax deduction on Tuition fees can only be claimed for full-time courses, be it school, graduation, or post-graduation. The fee paid towards part-time education cannot be claimed as a deduction.
- Maximum Age: There is no maximum age for claiming this deduction.
- Affiliated Institution: The school, college, or university the child is studying should have the necessary affiliation with the necessary educational body. This deduction is available only if the fees paid are in India.
Non-Eligibility of Tuition Fees Deduction Section 80C
Section 80C of the Income Tax Act provides various deductions for certain eligible investments and expenses, but it does not allow a deduction for tuition fees. Here's the non-eligibility of tuition fees deduction under Section 80C:
- One-time school admission charges
- Annual charges
- Transportation costs
- Charges for extra classes
- Fee for curricular activities
- Charges for smart classes
- Costs related to sports and activity classes
- Expenses for coaching or private tuition
- Hostel fees
- Mess charges
- Boarding fees
- Library costs
- Stationery expenses
- Excursion fees
- School donations or college donations
- School development work charges or college development work charges
- Late school payment
- Readmission fees
- You cannot claim a deduction for payment towards part-time courses.
- You cannot claim a deduction for payment of school fees for yourself, your spouse, siblings, parents, or any other relative.
- Payment of fees to universities outside India is not allowed for this deduction.
Eligibility Criteria to Apply for Exemptions Under Section 80C
No Minimum age is prescribed for claiming reimbursement of the Child Education Allowance fee(CEA) with respect to children admitted to nursery classes. While for physically challenged or specially-abled children, there used to be a minimum age barrier of 5 years for vocational training, which stands removed as of 21st February 2012. So there is no minimum age whatsoever for any CEA fee reimbursement claims.
The maximum age for any average child is 20 years for claiming reimbursement under CEA, while the maximum age for specially-abled children is 22 years.
Eligibility for School or the Institution your child is studying in
The School institution in question has to be recognized by the Central Government, State Government, or by UT Government by any University or a recognized educational authority having jurisdiction over the area where the institution in question is situated. These conditions also apply with respect to the children studying in the two classes before class 1, i.e., nursery, LKG, and UKG.
How to Claim Tax Exemption for Tution Fee Payments?
There is a set of steps that you need to follow to Claim tax benefits on Tuition fees, and the following steps will guide you in claiming your tax benefit.
- For Salaried Individuals -
Submit the receipt issued by the educational institution for the payment made in the current financial year to the employer
- For Non-Salaried Individuals:
Show the Tuition Fee paid in form 12BB before submitting the proof at the end of the financial year.
- For any individuals other than salaried individuals, they have to claim the deduction under the VI-A schedule by showing the fee paid under section 80C during the filing of an income tax return.
Note: It should be noted that Education allowance under Section 10(14) and Tax Deduction for Tuition fees under Section 80C are two different provisions that can be claimed according to the prescribed limits under The Income Tax Act, 1961.
You have learned about the benefits of claiming child education-related expenses under section 80C. Don’t miss this opportunity to save tax and invest in your child’s future. The deadline for filing ITR is 31st July, so hurry up and file your Income Tax Return now. Avoid the stress and errors of last-minute filing.
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