Section 80 C of Income Tax Act, 1961 and FAQs
Relevant part of the section 80 C 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:
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. Deduction for tuition Fees is available up to Rs.100000 /-.
2. The limit of one lac 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 can not exceed Rs. 1,00,000.
3. The deduction is available to Individual Assessee and not for HUF.
4. The Deduction is available for any two children.
5. This is the only clause, where assessee can not claim tax benefit for expenditure done on himself. Means if assessee has paid tuition fess for his studies, he will not be eligible.
6. Deduction is not available for tuition fees paid for studies of spouse.
7. The deduction is available for Full Time courses only, so no deduction for part time or distance learning courses.(This is my opinion but point is not very clear).
8. The fees should be paid to university, college, school or other educational institution, so no rebate for private tuitions.
9. Tuition fees paid for coaching courses for admission in professional courses or any other type of courses are not covered as that fees is not paid for FULL time education.
10. The center mentioned above must be situated in India, so location should be in India though it can be affiliated to any Foreign Institutes.
11. 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, so admission fees is also allowed. In my opinion Transport charges, hostel charges, Mess charges, library fees, scooter/cycle/car stand charges are not allowed. Building fund or any donation etc not allowed.
FAQs regarding Section 80C
Que: Can Mother claim the benefit of tuition fees paid for his son/daughter.
Ans: Assessee means both mother and father both can take the benefit u/s 80 C for amount paid by them respectively.
Ques: If a couple have four children, can they both claim fees for two children each?
Ans: Yes, husband and wife both have a separate limit of two children each, so they can claim deduction for 2 children each.
Ques: If a Couple has one child and paid a fees of Rs. 200000 can they both claim tuition fess 100000 each ?
Ans: yes, they both can claim deduction for 100000 each subject to they have actually paid same amount .If husband has paid 1.50 lac and wife has paid 50000 then husband can claim 100000 and wife can claim 50000.
Ques: Mr. A has paid tuition fees for his child 2000/- in February 2008 relates to period March to June 2008 ,how much amount he can claim deduction in assessment year 2008-09?
Ans: He can claim full Rs. 2000 in assessment year 2008-09, 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.
Ques: Is late fees paid with tuition fees is eligible for deduction?
Ans: No, late fees is not eligible for deduction.
Ques: Is tuition fees admissible for pre nursery class also?
Ans: Pre-nursery, Play school and Nursery class fees is also covered under section 80C (circular 9/2008 & 8/2007)
Ques: A has paid Rs. 36000 (Rs. 8000 admission fees, rs 5000 development fees rs 5000 caution money, rs 12000 annual charges and rs 6000 @ rs 2000 per month for April-June 2008 fees) in Dec 2008. how much he can claim reimbursement as well rebates/deductions in 2008-09 and 2009-10.
Ans: As explained above in the article, tuition fees meaning is wide in income tax as generally perceived, so in my opinion admission fees rs 8000 ,12000 annual charges and 6000 fees is covered for claim u/s 80C. Development Fees is not allowed and caution money, as it is refundable amount, hence not allowed. You can claim the tuition fees on payment basis whether relates to this financial year, old or coming financial year.
Ques: Are there any particular educational courses for which income tax exemption is given?
Ans: No specific course defined in the Income tax act, but course should be in India and a full time course.
Written By : CA. Jatin Bansal
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