Summary of Tuition/School Fees Deduction u/s 80C

Deduction u/s. 80C for Tuition/School Fees paid for Education of Children

With the increasing rate of inflation the cost of everything is rising consistently whether it is living cost or education cost. But in case of money spent on educating a dependent child one can get tax benefits upto a certain limit. Section 80C of Income tax allows a deduction from the total taxable income spent on education of child.

Relevant part of the section 80c is reproduced here under:

“(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)”

“(4) The persons referred to in sub-section (2) shall be the following, namely:

(a)………………….
(b)…………………..

c) for the purposes of clause (xvii) of that sub-section, in the case of an individual, any two children of such individual.”

on the basic of above following points are to be noted:

1. Eligibility

Available to only Individual Assessee, not available to HUF.

2. Maximum Number of Children

Deduction under this section is available for tuition fees paid on two children’s education. If Assessee has more than two children then he can claim tuition fees paid of only two children’s. The section does not mention anything about the legality of children, so fees paid for education of Adopted child is also eligible for deduction.

Note: Husband and wife both have a separate limit of two children each, so they can claim deduction for 2 children each (total of 4 children)

3. Fees paid for Self education and Spouse Not allowable

If Assessee has paid tuition fees for his own studies or for his/her spouse studies, he will not be eligible for deduction.

4. Maximum Limit of Deduction

Deduction for tuition Fees is available up to Rs.1,00,000.The limit of one lakh as above is total limit u/s 80C for all type of savings ,plus section 80CCC(pension policy) plus u/s 80CCD(Contributory Pension Plan), means the aggregate amount of deduction under above referred sections cannot exceed Rs. 1,00,000.

Note: This deduction is available to the parent who has made the payment (in case both the parent has made payment than the deduction is allowed to both subject to maximum limit), to the extent of the tuition fee actually paid or Rs1 lakh, whichever is lower.

5. 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 2012 if Paid in March 2012 will be eligible for deduction u/s. 80C in A.Y. 2012-13. Also Payment of Late fees and Term Fees are not eligible for deduction.

6. No Deduction for part time course

The deduction is available for Full Time courses only. No deduction for part time or distance learning courses.

7. Fees for Private tuition/Coaching Classes Not Eligible

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 (CA, CWA,CFA,CS etc.) or any other type of courses are not covered as that fee is not paid for FULL time education. No rebate for private tuition.

8. 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.

9. Pre-nursery, play school and nursery class fees is also allowed

Pre-nursery, play school and nursery class fees is also covered under section 80C. (Refer circular 9/2008 & 8/2007).

10. Development fees or donation of any kind (Building Fund, Maintenance Fund etc) not eligible

In this section tuition fees has a wide meaning than normal parlance ,means here tuition fees means total fees paid minus any payment towards any development fees or donation or payment of similar nature such as fees for games, magazines, stationery, Parents’ Teacher Association fees, Staff Benefit Fund, Gratuity Fund, and hostel will not qualify for the deduction? 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.

11. Transport charges, hostel charges, Mess charges, library fees, scooter/cycle/car stand charges incurred for education are not allowed.

12. Unmarried person can also claim deduction under this section.

Clause (c ) of subsection 4 of Section 80C speaks of “any two children of Individual” means it is silent on legality of child. So even an Unmarried Person can claim deduction and also deduction is allowed if fees are paid for educating an adopted child.

13.  Allowability of Deduction if Fees paid in case of Divorce.

Section 80C does not require any condition of subsistence of marriage to claim the deduction under clause (xvii) of section 80C. So even in case your marriage is not subsist then the parent paying the fees is eligible for deduction.

14. If both father and mother paid proportionality

i.e. father paid 1,50,000 and mother paid Rs. 90,0000, than how much deduction will be allowed.

Both father and mother can claim deduction u/s 80C up to a maximum of Rs. 1,00,000 each. Father can claim deduction up to 100000/- and mother can claim deduction of Rs. 90,000/-.

15. I have paid tuition fees for my child 12,000/- in February 2012 relates to period march to June 2012 ,how much amount I can claim deduction in assessment year 2012-03?

You can claim full 12,000 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.

Update: (no amendment but added the definition and analysis of tuition fees which is not defined anywhere in the law)

Only tuition fees is eligible. Tuition fees has not be defined. However, what is not tuition fees is defined by way of exclusions. In the section itself we find the following wordings:

As tuition fees (excluding any payment towards any development fees or donation or payment of similar nature)…

We find that the following items are specifically excluded:

  • any development fees or
  • donation or
  • payment of similar nature

The above items suggests that any payments of nature like development fees, donations or payment of similar nature are not eligible for deduction. On consideration of these items we can say that payments which are in nature of capital contributions for development by way development fees or donation or otherwise will not be included in tuition fees. These payments may be of recurring nature or casual nature.

In other words, expenses which are of revenue nature and which are in nature of tuition fees are eligible. In this regard we can refer to definitions of tuition and tuition fees:

Tuition:- the activities of educating or instructing; activities that impart knowledge or skill;

Tuition fee – a fee paid for education and instructions to impart education to students.

Thus fees which are in nature of providing full time education and incidental instructions and training are part of tuition fees.

Other items of payments should be eligible:

What is not eligible is excluded; Therefore, any other payment which is in nature of fees for imparting education and training shall for part of tuition fees.

Items described under different heads which are in nature of tuition fees are eligible:

We find that schools charge various type of tuition fees for imparting education in different fields. For example, computer education including practical training on computers is now an essential for students pursuing education in any filed or stream. Science students are required to be educated in practical in laboratory, or workshops. Schools charge fees for computer education, lab fees etc. these payments shall therefore be part of tuition fees.

Schools also charge session fees –this is not in nature of donation, development fees or payment of similar nature, therefore session fees is not a prohibited items of payment, This is tuition fees charged per session instead of per month.

Fees for games and sports:

Games and sports are very essential for proper education and development of children. Games and sports are necessary part of educations at least till school final. Games and sports enable children to acquaint themselves with many skills which are necessary for proper education and application of knowledge. Therefore, recurring fees for games and sports should be considered as a part of tuition fees. However, capital contributions by way of development fees, donation etc. for such activities will not be eligible.

  • jyothi

    hello sir
    am an unmarried employee is my brother’s tution fee taxable

    • thesanyamjain

      This section talks about education of children not of siblings. So your brother’s tuition fee is not eligible for deduction and hence taxable.

  • jonathan

    Could you please clarify, about the fees collected by the school for books and notes are eligible for deductions or not

    • thesanyamjain

      Since these expenses are in nature of providing full time education and incidental instructions and training are part of tuition, thus eligible for deduction.

  • Dhanya Sree

    for playschool, please let me know which of the given components are eligible for deduction u/s 80-c – annual fee, admin fee, tuition fee, student kit, smp(sms,mail), registration, transport fee.Thanks.

    • thesanyamjain

      We shall go by negative approach i.e. the expenses which are not allowed in case of pre-nursery or playschool deduction:

      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.

      Although above list is not exhaustive but cover almost all types of expenses.

      As per above, you can claim annual fee, admin fee, student kit, smp (not sure), registration but not transportation fee.

      • Dhanya Sree

        appreciate the detailed reply..thanks!!

  • Anand Gupta

    Whether admission fees is liable for deduction u/s 80-c or not ?

    • thesanyamjain

      Yes admission fees can be claimed as a deduction under section 80C but not for private tuition or institute.

  • JITESH

    IS ADMISSION FEE AND ANNUAL CHARGES ARE ALLOWED

    • thesanyamjain

      Yes both are allowed if paid 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.

      Amount paid for private coaching cannot be claimed as deduction.

  • Miguel Carvalho

    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 deduction for 1 installment and my spouse for the other. BTW we are from Goa and the ‘Communiao Dos Bens’ law is applicable.

    Thank you in advance

    • thesanyamjain

      Since you have paid tuition fees from you joint account, only one of you can claim deduction under section 80C.

      And also you are covered under ‘Communiao Dos Bens’ law which says that salary shall be assessable in hands of the assessee who actually earns it, so in either only one of you can claim deduction of the tuition fees paid.

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