Now, an individual tax payer can claim income tax deduction on tuition fee that is paid to schools or colleges for higher education of children under section 80C of income tax act, 1961.
Payments towards tuition fee to any university or colleges or educational institutions in India for a full time education at the time of admission or otherwise is eligible for tax deduction under section 80C.
Fees like development fee or donation or capital fee or any other fee of similar nature is not eligible as tuition fee under section 80C.
Deduction for tuition fee is available only for any two children of an individual. If you have more than two children then you have to choose any two children for whom you want to claim tuition fee deduction.
If your spouse is a taxpayer then you can also claim the benefit of tuition fee deduction from her taxable income but you both can not claim for the same child.
Full time education which is eligible for tuition fee deduction also includes payment made for play school activities, pre nursery classes and nursery classes. (circular 9/2008, 8/2007)
If your children are taking any part time courses or distance learning courses then the tuition fee paid toward that will not be eligible as tuition fee under section 80C.
Who can claim tuition fee deduction – Section 80C
Tuition fee deduction under section 80C, is available to any person including a salary person, self employed person who paid tuition fee during the financial year for their children.
If you have incurred tuition fee for your own study or for your spouse then that is not qualifying for deduction under section 80C of income tax act, 1961 as it is available for the payment you make towards your children’s education.
Maximum Tax Deduction Allowed on Tuition Fee
According to section 80C of income tax act, a maximum amount of Rs. 1, 00,000 can be availed under section 80C, 80CCC or 80CCD(1). So, if you don’t have any other investment mentioned under these three sections then you can claim total deduction of Rs. 1, 00,000 as tuition fee.
If you have any other investments like Life insurance policy, provident fund etc then all together you can claim a deduction up to Rs. 1, 00,000.
Budget 2014 has introduced a higher tax deduction of Rs.150000 in section 80C. If this budget passed then from assessment year 2015-2016 onwards you can claim a higher tax deduction of Rs.150000 under section 80C.
FAQ on tuition fee – Section 80C of Income Tax Act, 1961
I have three children for whom I am paying 65, 000 every year as tuition fee. What will be my eligibility for income tax deduction under section 80C?
According to section 80C of income tax act, Rs. 1, 00,000 can be claimed as income tax deduction for payment towards tuition fee. But It’s restricted only to two children.
In your case, you can claim maximum deduction of up to two children for the tuition fee. You can take the higher amount of tuition fee that you paid for you child and claim it as a tax deduction.
If your spouse is also a tax payer then she can take such benefits up to a maximum number of two children. With this your spouse can also claim tuition fee deduction for one child that you are unable to claim
Budget 2014 has increased a the maximum tax deduction limit of section 80C from Rs. 100000 to Rs. 150000. If this budget is passed then you can claim higher tax deduction of Rs. 150000 for your children’s tuition fee.
We are salaried person and incurred a tuition fee of Rs. 2, 00,000 for our only child studying in a college. Can we both claim income tax deduction of Rs. 1, 00,000 each?
Yes, deduction under section 80C can be claimed provided you both have incurred this expenditure i.e. you have paid Rs. 1, 00,000 and your spouse also paid Rs. 1, 00,000 for tuition fee. If any one of you paid less then he or she will be eligible for lesser amount and the balance left out can not be claimed as deduction.
For example in the above case if wife has paid Rs. 50, 000 and the husband has paid Rs. 1, 00, 000 then wife can claim Rs. 50, 000 as tax deduction and in the case of husband its Rs. 1, 00,000. The balance of Rs. 50, 000 can not be claimed as tax deduction.
Next time when you make payment towards your tuition fee you need to make sure that you both paid Rs. 1, 00,000 each.
Can I claim tuition fee deduction for my daughter’s play school payment?
Yes, tuition fee paid towards your daughter’s play school can be claimed as deduction. Please remember it’s restricted to only two children. If you have more than 2 children then your income tax deduction claim will be restricted to only two children.
In addition to my tuition fee payment, I have investment in life insurance policy of my son and contribution to public provident fund account. What will be my eligible deduction under income tax act?
As per section 80C of income tax act, the total amount available for income tax deduction is Rs. 1, 00,000. You can not claim individual deduction under section 80C as this section provides deduction of Rs. 1, 00,000 for some specified investments in which all the three investments you mentioned are there. For details on section 80C please read this article
I have incurred tuition fee for my dependent children’s college education in USA. Can I claim tax benefit under section 80 C of Income tax Act, 1961?
NO, as per the provision on income tax act, tuition fee paid in India is allowed as income tax deduction.
Note: Budget 2014 has increased the maximum tax deduction limit of section 80C from Rs. 100000 to Rs. 150000. If this budget is passed then you can claim higher tax deduction of Rs. 150000 for your children’s tuition fee.