Deduction u/s. 80C
for tuition / school fees paid for education of children
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 childreneach, 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 thetuition 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.
FREQUENTLY
ASKED QUESTIONS ON DEDUCTION FOR TUITION FEES U/S. 80C
Q. Can an unmarried person can claim
deduction u/s 80C of Income tax Act, 1961 for school feepaid for 2
children?
Answer: Yes he can. As clause (c
) of subsection 4 of Section 80C only speaks of children’s
ofIndividual. Section 80C is silent on legality of child and it does not
say that child should be legal child.
Q. Can I claim deduction u/s 80C
of Income tax Act, 1961 for my adopted child’s school fees?
Answer: Yes you can. As section 80C
again silent and do not specify that child should be biological child for the
purpose of claiming deduction under clause (xvii) of section 80C.
Q. I have divorced to my wife and have
custody of my son with me and paying his school fees. Will I be eligible for
deduction u/s 80C of Income tax Act, 1961 for school fee paid on his
education?
Answer: Yes you will. As section 80C do
not specify that marriage should continue to claim the deduction under clause
(xvii) of section 80C.
Q. Can I claim deduction under section
80C for tuition fees paid to an Indian institution for my wife’s
education?
Answer: No you can’t claim. Deduction
u/s. 80C is available only for tuition fees paid for two
children’s education.
Q. I and my wife both paid
for education of our one child. My wife paid 70,000 and I paid 1,10,000/-
can we both claim deduction?
Answer: Yes both of you can claim
deduction u/s 80C up to a maximum of Rs. 1,00,000 each. You can
claim deduction up to 100000/- and your wife can claim deduction of Rs.
70,000/-.
Q. I am currently working and studying.
If I pay my tuition fees out my own earnings and do not take an
educational loan, will I get any tax benefits?
Answer: The tuition fees paid
by you will not make you eligible for any tax benefits. You will not be able to
claim any income tax deduction.
Q. I am a working women and I am paying
the education fees for my husband education. Can I claim the deduction for
this?
Answer: Payment of tuition
fee up to Rs 1 lakh can be claimed as deduction u/s 80C of the I T Act.
But the payment of tuition fee for full time course must be for for
any two children of individual. It follows therefore one can not
claim deduction for payment of tuition fee for his/her spouse.
Question:-
Section 80C allows deduction in respect of tuition fee but excludes
payments towards development fees, donations or payments of similar nature.
Does
this mean that the items not specifically excluded, such as fees for games,
magazines, stationery, Parents’ Teacher Association fees, Staff Benefit Fund,
Gratuity Fund, and hostel will not qualify for the deduction?
Answer:- None of these will qualify for
deduction under Section 80C of the Income-Tax Act, 1961.
The deduction available under this
Section is for sums paid as tuition fees (excluding any payment
towards any development fees or donation or payment of a similar nature)
whether at the time of admission or thereafter to any university, college,
school or other educational institutions within India for the purpose of
full-time education of any two children of an individual. The
principle requirement for qualifying for deduction under this provision would
be that the fee paid should be in the nature of tuition fee. All of the
items enumerated by you are essentially not in the nature oftuition fee, and so
cannot qualify for deduction.
You may note that the development fee
or donation or payments of a similar nature even if they are in the nature
of tuition fees will not qualify for the deduction under this Section.
Question:-
Can Mother claim the benefit of tuition fees paid for his
son/daughter.
Answer: Assessee means both
mother and father both can take the benefit u/s 80 C for amount paid by them
respectively.
Question:-
If a couple have four children, can they both claim fees for two
children each?
Answer: Yes ,husband and wife both have
a separate limit of two children each ,so they can claim deduction
for 2 children each.
Question:-
If a Couple has one child and paid a fees of 200000 rs can they both claim
tuition fess 100000 each ?
Answer: yes ,they both can claim
deduction for 100000 each subject to they have actually paid same amount .If
husband has paid 1.50lac and wife has paid 50000 then husband can claim 100000
and wife can claim 50000.
Question:- Ram has paid tuition fees for his child
2000/- in February 2011 relates to period march to June 2011 ,how much
amount he can claim deduction in assessment year 2012-03?
Answer: He can claim full 2000 Rs
in assessment year 2012-13 , as this deduction is available on the basis of
payment and it may or may not be related to the period in which it has been
paid.
Question:-
Is Late fees paid with tuition fees is eligible for deduction ?
Answer: No,late fees is not
eligible for deduction.
EXTRACT
OF SECTION 80C
Clause
xvii of section 80C
xvii) as tuition fees (excluding any
payment towards any development fees or donation or payment of similar nature),
whether at the time of admission or thereafter,
(a)
to any university, college, school or other educational institution
situated within India;
(b)
for the purpose of full-time education of any of the persons
specified in sub-section (4);
Subsection
4 of Section 80C
“(4) The persons referred to in
sub-section (2) shall be the following, namely:
(a)
………………….
(b) …………………..
(b) …………………..
(c) for the purposes of clause (xvii)
of that sub-section, in the case of an individual, any two children of such
individual.
--
Thanks and Regards
V. C. GARG & CO.
Chartered Accountants
CA VIVEK CHANDRA GARG
B.Com., FCA
K-34A, Kalkaji, New Delhi-110019
Phone: 011-26291583, 9810621995
Email: gargvivek05@yahoo.com
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