Child tuition fees refer to tuition fees paid to universities, schools, colleges, or other regular educational institutions in India. In order to encourage education of children, the Government of India provides tax relief to parents on child tuition fees.
You can deduct child tuition fees of up to ₹150,000 from your taxable income, and thus save on income tax.
Example 1: Your annual income is ₹950,000, and you incur child tuition fees of ₹75,000 every year. For tax purposes, you can deduct ₹75,000 from your income and pay tax only on ₹875,000.
Child tuition fees can also include payments made to playschools or nursery classes. Also, tuition fees paid for an adopted child can be claimed for tax deduction.
Number of Children: Child tuition fees can be paid for two children per taxpayer. If there are four children, the husband and wife can claim the benefits for two children each.
Example 2: Let's say you have four children, and you have incurred tuition fees of ₹75,000 on each child. Out of the ₹300,000 spent on child tuition fees, you can claim a deduction of ₹150,000. However, the remaining 150,000 can be deducted from your spouse's income. So, both of you combined can deduct ₹300,000 from your child tuition fees.
Payment basis: Tax benefits related to child tuition fees are on a payment basis. So, if you make a payment for child tuition fees which was due in the previous year, you can claim a tax benefit in the present year.
Example 3: You have paid child tuition fees of ₹50,000 in assessment year 2015-16. However, this fees was due in the previous assessment year, 2014-15. Since the benefits of child tuition fees are on a payment basis, you can deduct ₹50,000 from your taxable income in the year 2015-16.
Child tuition fees have been constantly increasing. Private school fees can be anywhere between ₹35,000 and ₹100,000 per annum. The tax benefit on child tuition fees can provide significant savings in income taxes.
Use our Indian Tax Calculator to see how your tax liability is impacted by child tuition fees.