Tds deduction at source

This query is : Resolved

manojkumargupta (Querist)
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08 March 2013 sir
i am a salaried employed.
for my higher education company is providing education assistance of 75% of my tution fees which is non refundable IF I pass.
But if i do not pass i have to refund.
Is this education assistance taxable in my hand.
my account department want to deduct tax on it.
kindly clarify.

CA Prashant Gupta

CA Prashant Gupta (Expert)
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08 March 2013 as per my view this is for like training exp. I don't think they should deduct TDS on it. because if u failed you will refund (I hope you will pass).
They can treat it as business exp.

Santosh Mishra

Santosh Mishra (Expert)
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08 March 2013 At the first instant, Income tax department has not specified any provision for any concession on education fee reimbursement given by an employer. Hence, your education assistance will be fully taxable.

In case a company provides any facility /assistance to develop skills which can help employees to increase contribution in their routine job, can be treated as non-taxable income in the hands of employees.

But this is an aggressive opinion and Company should have a standard policy in place which is applicable for all employees.

manojkumargupta

manojkumargupta (Querist)
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30 March 2013 Is their any income tax provision which allow this expense as training expense/business expense in the hand of compnay and thus become non taxable in the hands of employee.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Hey! About the education assistance from your company — here’s the gist:

### Is the education assistance taxable in your hands?

* **Generally, yes.**
The amount reimbursed or paid by the employer for your education or tuition fees is **considered a taxable benefit** in your hands as salary income.

* **Why?**
Because it’s a financial benefit linked to your employment, not a separate training facility provided by the company.

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### What about TDS deduction?

* Since it’s taxable income for you, your employer **can deduct TDS on the reimbursed amount** just like salary.

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### Any way it can be non-taxable?

* If the company reimburses **training or skill development expenses directly related to your job** (like professional certification fees, job-related courses) and has a clear, consistent policy for all employees, then sometimes such reimbursements are **not taxable**.

* But regular **education fees for higher studies (like degree courses)** are usually taxable unless they fit very specific criteria.

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### On the company side:

* The company can usually claim this as a **business expense** or training expense, but it doesn’t automatically make it non-taxable in the employee’s hands.

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### Summary:

| Point | Taxability Status |
| -------------------------------------------- | ----------------------------------- |
| Tuition fees reimbursed for higher education | Taxable in employee's hands |
| Employer deducts TDS on reimbursed amount | Yes, applicable |
| Training expenses directly related to job | May be non-taxable if policy exists |

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If you want, I can help draft a note or explanation for your accounts department or dig into any related rules further. Let me know!

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