I am unable to save a lot due to the school fee payments? How do I maximise my tax deduction this year?

If you are a parent and your kids are attending school, you can claim the fee paid towards their tuition as a deduction from your total gross income. The tuition fee paid qualifies for tax benefit under Section 80C, and thus, you are eligible to claim up to Rs 1,50,000 as tax deductions. This will also apply to parents who are paying for their kids’ full-time college education. 

If you are looking for maximising your tax returns; therefore, the tuition fee for the full-time education for your child can help reduce your total tax liability. For example, if your income is more than Rs 10 lakh, you would fall in the highest income bracket. As a result, you would have to pay as much as   31.2  percent (30% + 4% cess on 30%) as income tax. However, if you are paying Rs 80,000 every year as your child’s school fee, you can declare this amount while filing your taxes and save as much as Rs.  24,960 in that year.

Are all schools/colleges eligible?

In India, if you are paying tuition fees for your child at the time of admission or anytime during the financial year to any college, registered university, educational institution or school, you are eligible to receive tax benefits. You must enrol your child in a full-time education program, including any pre-nursery, nursery classes and play school activities. Moreover, the institution can be either government sponsored or a private one.

Are all payments covered?

There are times, when you would have to make payments, in addition to the tuition fees, to a school/college. However, payments made such as donations, development fees or capitation fees do not qualify for tax benefit under Section 80C. Moreover, if you didn’t pay the fees on time, the applicable late fee paid would not be eligible for tax deductions.

Tax benefit on tuition fees for how many children?

You can claim tax benefits on the fees paid for up to two children. Thus, if a couple has four children, both partners can claim the tax benefit since each has a separate limit of two children each.

Which parent would get the tax benefit?

The parent who makes the payment is eligible to receive the tax advantage. In case, both parents are working, each one of them can claim separately, up to the total amount of fees paid. Therefore, if the tuition fee for your children is Rs 2 lakh, of which you paid Rs 1.5 lakh while your spouse has paid Rs 50,000, both of you can claim the amount individually for the total payment made by them.