Paid your kid's school/college fees? Use it to get a tax benefit

Did you know that you can actually claim an income tax deduction for the tuition or school fees you paid for your child? In fact, as per the income tax laws only an individual can claim this tax benefit and doesn't benefit entities like HUF.

"This deduction is up to Rs1 lakh and falls under section 80 C of the I.T Act, and you can claim a deduction for fees paid for only two children,"Amit Dani, Chartered Accountant, and Certified Financial Planner said.

In fact, this benefit can be availed for fees paid for your kids- you can't avail of it if you're paying your sibling, spouse or even for a course that you may have enrolled for. Only fees paid towards the education of two children qualifies. If you have more than two kids, and your partner is a tax payer, he can claim the tax benefit for the other child, again within the maximum limit of two children.


Only fees paid towards the education of two children qualifies.Reuters

Keep in mind that only full time courses qualify for tax deduction. It does not matter which college, university or school it is as long it's in the country. In fact even pre-schools are covered, which is good given the cost of private primary education has been rising rapidly.

"This deduction covers fees, not donations, establishment charges, or any other charges like hostel fee, or commutations, lab charges and like," Dani said.

The cost of education, especially higher education, is rising quickly and there's a good possibility that both you and your spouse have had to shell out money to pay for your child's education. In such a case they can both can claim within the limit of Rs1 lakh each. So if your spouse pays Rs 1 lakh and you pay Rs 70 lakh, you both can claim the paid amount for tax deduction.

Of course there are other options under section 80 C which help you get deductions, but if you have paid your child's fees and haven't exhausted the other 80 C tax savings instrument options you might as well make the most of this tax benefit.

Published Date: Feb 08, 2014 12:26 pm | Updated Date: Dec 24, 2014 02:02 pm