Income Tax News: IMPORTANT, Parents Take Note! Reduce Your Tax Burden With Savings on Tuition Fee, Check How

Income Tax News: In India, nurturing your child's education is an investment in their future and the nation's progress. Thankfully, the government offers tax benefits to ease the financial burden and encourage educational pursuits. This article unravels these tax benefits, making your journey towards securing your child's future smoother.

Navigating Tax Benefits for Children's Education

In the labyrinth of tax regulations, several avenues exist to ease the burden of children's education expenses. Here's a glimpse of what's on offer:

Children's Education Allowance

• Granting INR 100 per month per child for up to 2 children, this allowance extends a helping hand to salaried taxpayers.
• Eligibility hinges on incurring expenses within India, as stipulated in Section 10(14) of the Income Tax Act.

Hostel Expenditure Allowance

• Catering to the accommodation needs of young scholars, this allowance provides INR 300 per month per child for up to 2 children, again contingent on expenses being domestic.

Tax Deduction on Tuition Fees

• Section 80C of the Income Tax Act opens doors for parents to claim deductions on actual tuition fees paid to educational institutions.
• However, ancillary fees such as development charges and transportation expenses are not eligible for this benefit.

Exemption for Children's Education and Hostel Expenditure

• Ensuring a sigh of relief for taxpayers, certain exemptions are granted under specified conditions, lightening the load of educational expenses.

Navigating Tuition Fee Deductions under Section 80C

A beacon of hope for parents, Section 80C illuminates the path to substantial deductions on tuition fees. Here's a closer look at eligibility criteria:

Who's Eligible?

• Solely parents, including those with adopted children, can avail of this deduction.
• Each parent can claim deductions for a maximum of 2 children, totaling 4 children if both are taxpayers.

Maximum Limits

• A cap of INR 1.5 lakh per financial year is imposed on this deduction, alongside other sections like 80CCC and 80CCD.

Defining Tuition Fees

• Only payments toward full-time education qualify for this deduction, excluding ancillary charges like development fees or private coaching expenses.
• The institution must be situated within India to be eligible.

Claiming the Deduction

• Deductions are applicable solely on actual payments, not on a payable basis.
• Non-salaried individuals can also claim this benefit under the VI-A schedule of Section 80C, albeit without the requirement of bill submission during ITR filing.

Claiming Tax Exemptions: A Step-by-Step Guide

For Salaried Individuals

• Submission of fee receipts to employers by year-end, accompanied by declaration in Form 12BB, facilitates claiming deductions.

For Non-Salaried Individuals

• Receipt preservation serves as the cornerstone for claiming deductions, sans the necessity of bill submission during tax filing.

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