• Aug
  • 19
  • 2014

Deduction on children’s education u/s. 80C & 80E

CA Sandeep Kanoi

The cost of educating our children is rising consistently. It’s a matter of concern for all of us. One relief is the tax benefit provided for spending on children’s education. The Income Tax Act provides a direct deduction on account of fees paid for the education of dependent children. The act also provides for deduction on account of interest on loans taken for higher education of children.

Under Section 80C on Tuition Fees Paid

This deduction in respect of school fees is covered under Section 80C of the I-T Act. A parent can claim a deduction of payment made for tuition fee to any university, college, school or any other educational institution.

The deduction on payments made towards tuition fee can be claimed up to Rs 100,000 (Limit Raised to Rs. 1,50,000/- from A.Y. 2015-16), together with deduction in respect of insurance, provident fund and pension.

But, there are certain conditions to get this. It can only be claimed in respect of two dependent children and for fees to an educational institution within India and, for tuition fee only. Payment as donation or development fee to an educational institution does not qualify.

The following are the deduction allowed under tuition fees

  • Fees paid to regular educational institution irrespective of the class attended by the child.
  • Payment of fees to play schools or creches will be allowed as deduction.
  • Fees for admission are excluded from amounts eligible for deduction.
  • The deduction is allowed only for two children.
  • Deduction is available of paid basis.
  • Adopted Child’s tuition fees is also eligible for deduction

The following are the deduction not allowed under tuition fees

  • Deduction is not allowed for private tuition, coaching center.
  • University College School or other educational institution must be situated in India. It can be affiliate to any foreign university.
  • A late fee is not eligible for deduction.
  • Development fees or donation is not eligible.
  • Payment of fees for overseas education is not allowed.
  • Fees for admission are excluded from amounts eligible for deduction.
  • Transport charges, hostel charges, Mess charges, library fees charges incurred for education are not allowed
  • Spouse’s tuition fees is not allowed for deduction.

Under Section 80E on Interest paid on Education loan

You can also get the benefit of direct deduction on the interest paid for a loan taken for the purpose of higher education. This is available under Section 80E of the I-T Act. This benefit can be claimed for a loan taken for education of yourself, your spouse, your children and the child for whom you are a legal guardian. It can be claimed for eight years in a row, beginning from the year when the interest payment starts.

As the benefit can be claimed by the parent as well as the child, the person taking the education can start claiming this deduction once he starts earning and paying the interest himself. There is no cap on the amount up to which the deduction can be claimed.

The loan in this regard can be taken from any financial Institution or charitable institution recognised by the central government. It can be claimed on a loan taken for education anywhere in the world.

So if you are going to take a loan on education keep in mind these factors to avail the tax benefits:-

1-These deduction is available only to individual and not for H.U.F.

2-Deduction amount-The deduction amount is only the interest paid on the loan of higher  studies and there is no limit. You can get tax benefit on entire amount of interest paid but not the PRINCIPAL.

3-Deduction only will be available if interest is paid out of tax chargeable income.

4-Deduction only be available if the loan is taken from financial institutes or approved charitable institutes. Loan taken by family or relatives not included.

5-Loan should be taken for higher studies means any full time course of graduate or post graduate course. After +2 full time course would be eligible for it.

6-Deduction available only to self or dependent like spouse & children. From A.Y 2010-11 Relative also includes student for whom the individual is the legal guardian

7. Deduction period: – Deduction shall be allowed in computing the total income in respect of the initial assessment year* and seven assessment years immediately succeeding the initial assessment year or until the interest is paid by the assessee in full, whichever is earlier.The maximum tenure to get the tax benefit is 8 years.

8-The study can be anywhere in the world and not necessary to be in India.

(Republished with amendments)


42 Responses to “Deduction on children’s education u/s. 80C & 80E”

  1. sunil chaku says:

    Dear Sir,
    I want to know that whether Annual Charges paid to school will come under section 80C or not. Please clarify and send the reply in the mail provided above.
    Thanks

  2. A.S.VENKATA RAMANAN says:

    Dear Sir,

    In budget notification says and confirmed all ENHANCMENTS WILL EFFECT FROM F.Y.2015 -2016 (EFFCT DAY FROM 1ST APRIL 2015),BUT in yr comments and issue suggestion saying /informed to us which will be applicable for this F.Y.2014 – 2015 A.Y. 2016 – 2017

    Respected sir please give us your correctly as i have forward my friends and custoerms.R.S.CONSULTANT,TAX CONSULTANT MOBILE 9282154411 CHENNAI TAMILNADU

  3. Dear R S Shah,
    In my knowledge notification related to increase in PPF limit not yet been issued

  4. R S SHAH says:

    The Finance Act 2014 has been passed by both the house of parliament, the President has signed and thus it has become the Act.
    The limit u/s. 80 C has been increased from Rs 100,000 to Rs 150,000 w.e.f. 1.4.2014 onwards (Asst Year 2015-16).
    However we understand that PPF Act has still not been changed Till 19.8,14) to increase the limit to Rs 150,000 for subscription in PPF Account?
    Can You please confirm if the notification to the above effect has been issued ?

  5. Ajay says:

    My Spouse dad has taken education loan for my spouse before my marriage and I am paying it now.Can I get any benefits?

  6. P.S.Sitre says:

    My investment in LIC & Other Policies is Rs. 80000 & I also paid fees for Childern Education @ Rs.120000.I want to know How many total amt.Exempted from Tax whether 80000+120000 OR Both together Rs.100000

  7. DVS BHASKARAREDDY says:

    My daughter is studying in Madras IIt Eng.College (M.Tech) Am I eligible to clain Tuition fee for incometax benifit

  8. Anurag Rungta says:

    My mother is paying MBA fees of my brother to a Govt. recognized Indian institute. No loan has been taken for the same.

    I want to know whether she can get tax benefit U/S 80C.

    Please reply me in my mail as soon as possible.

    Regards
    Anurag

  9. R.SRINIVASU says:

    Sir, i had taken education lone for two children’s from SBI and I claimed the bank interest for exemption – i got lr stating that it was not included in TDS 16 claim by returns only whether it is correct –if not what is correct pl clarify

  10. Shaik Asif Afzal says:

    Hi,

    Can I claim the tax exemption if the tution fee is paid for my younger brother as my father is a retired employee…

  11. JIKRIYA MUJAWAR says:

    Sir, IF I TAKE REAMBURSEMENT OF TUTION FEE UNDER CHILDREN EDUCATION ALLOWANCE CAN I CLAIM THIS TUTION FEE FOR INCOME TAX BENIFITS UNDER 80C -

  12. JIKRIYA MUJAWAR says:

    Sir, IF I TAKE REAMBURSEMENT OF TUTION FEE UNDER CHILDREN EDUCATION ALLOWANCE CAN I CLAIM THIS TUTION FEE FOR INCOME TAX BENIFITS UNDER 80C – See more at: http://taxguru.in/income-tax/income-tax-deduction-on-your-childrens-education-us-80c-and-80e-of-the-income-tax-act-1961.html#comment-648788

  13. Hitesh B Shah says:

    Can a individual get exemption under section 80C for tuition fees paid and under section 80E for loan amount got from bank.

  14. B.Jayakumar says:

    Dear Sir,

    My daughter pursuing MS in USA and I have availed overseas educational loan through Credila in India.

    Please confirm whether loan interest is qualified under section 80 E.

    Thanks,
    B.Jayakumar.

  15. dawooth says:

    pre kg tution fee payment allowed for tax deduction or not send me reply

  16. Mangal Singh Rao says:

    Sir,

    My son is studying in 2nd year PGB (MBA), i have paid his tuition fees Rs. 1,20,000.00 on dated 17.04.2013.

    I want to know, can i get tax benefit U/S 80C.

    Pl. send me in my mail as soon as possible.

  17. Srivathsa says:

    I have availed a loan from my Dept(PSU) for my son’s higher education.Am I eligible to claim exemption under 80E.

  18. PRASHANT GADGE says:

    IF I TAKE REIMBURSEMENT OF TUTION FEE UNDER CHILDREN EDUCATION ALLOWANCE, CAN I CLAIM THIS TUTION FEE FOR INCOME TAX BENEFITS UNDER 80C

  19. PRASHANT GADGE says:

    Sir, IF I TAKE REAMBURSEMENT OF TUTION FEE UNDER CHILDREN EDUCATION ALLOWANCE CAN I CLAIM THIS TUTION FEE FOR INCOME TAX BENIFITS UNDER 80C

  20. abdul says:

    Sir,

    I have taken correspondence course for higher studies, can i take exemption for fess i have paid. PL suggest

  21. Dharmendra S dave says:

    Tuition fees means includes that Admission Fee, Computer Fee, Library Charges Fee, Smart Class fee and Tuition Fee. Is it deductible in under Section 80C of Income Tax Act.

  22. Deepak Sharma says:

    let me know who is avail the education loan interest benefit. student or parents ?

    with regards

    Deepak Sharma

  23. Anand says:

    I have paid for my wife’s education for higher studies. Wheather this can be accounted for tax deductions by me. If yes complete amount can be considered or else only tution fees? Kindly clarify

  24. o.v.marxis says:

    i took an educational loan for my daughter’s higher education from my department ( Airports authority of india-Govt of India ,PSU) and paying interest around Rs. 40000 per year. Am I eligible for tax deduction under section 80-E.

  25. Miguel Carvalho says:

    Dear Sirs,

    I paid my child’s tuition fee in 2 installments on 8/12 and 2/13 from our joint account.Could you please clarify if I and my spouse (as individual assessees)share my child’s tuition fee under 80C? I mean I claim for 1 installment and my spouse the other. BTW we are from Goa and the ‘Communiao Dos Bens’ law is applicable.

    Thank you in advance.

  26. James says:

    i had taken an educational loan for my son on the year 2003.I paid the interest for the same during this year.am i eligible for the rebate under section 80E

  27. Raju Baba says:

    Ques:Raju has paid Rs 50000 (Rs 12000 admission fees, Rs 5000 development fees Rs 5000 caution money, Rs 12000 annual charges and Rs 16000 @Rs 2000 per month for March-Oct 2012 fees) in January 2012. How much he can claim reimbursement as well rebates/deductions in Financial year 2011-12 and 2012-13.

  28. Raju Baba says:

    Ques:Ram has paid Rs 46000 (Rs 8000 admission fees, Rs 5000 development fees Rs 5000 caution money, Rs 12000 annual charges and Rs 16000 @Rs 2000 per month for March-Oct 2012 fees) in January 2012. How much he can claim reimbursement as well rebates/deductions in Financial year 2011-12 and 2012-13.

  29. monu says:

    a individual unmarried but he is paying school fees for students as a gardian whether can he get deduction under sec 80 c… if Legal gardian allowed… what is procedure to become legal gardian?

  30. SUBHADEEP BAL says:

    Dear Sir,

    Please let us know whether I will get the benefit of Principle of Education loan taking by me for myself for higher education.

  31. Rajeev Saxena says:

    Rs.100/- per month for per child i.e. Rs1200/- for education allowance may be deducted from Gross total income, In which rule it  is applicable. In ITR-1, in which part it may be shown. I think it may be indicated in B-3 with negative sign   

  32. Kapil Keswani says:

    i like to know that i m working in private institute and persuing full time Phd will i get rebate in income tax personally

  33. g.komaraiah says:

    can i get tax benifit under 80e for both children  during the same period

  34. Rajendra Rana says:

    80 E also available for Small Brother Education

  35. ritesh says:

    can we add these to tution fee for calculating child education under sec 80 c: registration fee, admission fee, quaterly fee (to cover picnic, expenses on teaching taekwondo, computers, yoga)

  36. VENKTESH says:

    deduction under 80e what are the eligible criteria?

  37. RAJESH GANESH says:

    I WANT TO KNOW ABOUT MAXIMUM AMOUNT OF DEDUCTION OF EDUCTION FEE U/S 80C
    AND DETAILS DEDUCTION U/S 80D,80CCD,80G.PLEASE SEND ME IN MY MAIL AS SOON AS POSSIBLE

  38. Nishant says:

    Is there an age limit for dependent kids.

    I have been working full time but now I am moving to do an MBA. Given the high costs of an MBA i am taking assistance from my father to pay the tuition fees. Would he be eligible for the the tax deduction still?

  39. N.V.Savant says:

    Is the tution fees for russian medical course(MBBS) is exempted?

  40. anantavardhana says:

    Sec 80E specifies educational institution recognised by the Central Govrnment. Therefore loan obtained for studies abroad are not eligible.

  41. Rajiv says:

    I want to know whether deduction under 80C can be claimed against payment of registration fee for professional courses like ICAI & ICSI.

    Regards,

    Rajiv

  42. Inder jit singh ubhi says:

    I require language of certicate to get from educational insitution when the education fee payment receipt not avalable

    regards

    inder jit singh ubhi

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