To promote education in India the Government has introduced various tax exemption in relation of expenses on school going children. Following are eligible expenses:

Tuition Fee:

Section 80C of Income Tax Act, 1961 provides deduction from gross total income for payment of 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);

Children Education/Hostel Allowance

Section 10(14) w.r.t. Rule 2BB (2) provide following exemption to individual employed in India:

  • Children Education Allowance: 100 per month per child up to a maximum of two children.
  • Any allowance granted to an employee to meet the hostel expenditure on his child: Rs. 300 per month per child up to a maximum of two children.

Free Education Perquisites

Where the educational institution itself is maintained and owned by the employer and free educational facilities are provided to the children of the employee or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, nothing contained in this sub-rule shall apply if the cost of such education or the value of such benefit per child does not exceed Rs.1000/- per month.

Note: If any deduction is claimed under any provision of Act then such deduction would not be available under other provisions.

Tax Planning Tools in India For AY 2016-17

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