Section 80C: Tuition Fees

Circular 1/2017 dated 02.01.2017 has been issued by the Income Tax Department which deals with computation of TDS for income tax assessees.

A part of the circular deals with tuition fees. There is an important clarification provided by the department which clears a lot of questions on tuition fees deduction under section 80C. The extract of the circular is reproduced as below:

Tuition fees, whether at the time of admission or thereafter, paid to any university, college, school or other educational institution situated in India, for the purpose of full-time education of any two children of the employee.

Full-time education includes any educational course offered by any university, college, school or other educational institution to a student who is enrolled full-time for the said course. It is also clarified that full-time education includes play-school activities, prenursery and nursery classes.

It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature.

Hence following can be noted for deduction

  1. Full-time education
  2. Play school activities, prenursery and nursery classes are covered.
  3. All fees paid towards education including computer fees, exam fees, library fees etc is covered.
  4. Donations or Capitation Fees or Development fees or similar fees only is excluded (generally what is taken into specific fund by the educational institution is not allowed. Since there is no income tax on such receipts to the institutions generally in the nature of trust)
  5. Education expenditure of self is not allowed.
  6. Education expenditure upto Rs.1.50 Lakhs is allowed as deduction under Section 80C  (expenditure should not be for more than 2 children) 
  7. Fees can be partly claimed by both the parents.
  8. Fees paid for education outside India is not allowed as deduction
  9. Deduction is available irrespective of the fact that the children of the assessee has attained 18 years.
  10. Transportation Fees, Uniform Fees, Hostel Fees, Mess Fees etc which are not directly associated with education is not allowed.