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Deduction u/s 80C

CA Ankur Goel (sr. executive) (133 Points)

02 July 2011

Payment of tuition Fee is eligible for deduction u/s 80C.

If someone takes a loan for education purpose, and then pay the tuition fee out of loan amount then ....

Is this amount can be eligible for deduction U/s 80C ?????

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20 Replies

jaganathan (accounts executive) (272 Points)
Replied 02 July 2011

yes ofcourse, it is eligible uder 80c.

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 02 July 2011

Provide the details of tution fees lik whom it is paid ,for wat purpose it is paid etc all tution fees are not eligilble , but only those whic are allowed as per sec 80C will be eligible.

CA Suraj Prasad Shaw (Chartered Accountant) (504 Points)
Replied 02 July 2011

Agrees with the above views

CA. MANAL CHAWLA (CA + CS Professional) (566 Points)
Replied 02 July 2011

tution fees is allow as deduction u/s sec 80C and education loan interest is also deductable under section 80E

Anjaly.P.A ( Article( CA Final)) (221 Points)
Replied 02 July 2011

It is eligible u/s 80C

shaishav soni (CA final) (348 Points)
Replied 02 July 2011

Yes indeed it would be eligible u/s 80c ,also will eligible u/s 80E only for interest component in instalment subject to conditions of sec 80 E.

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 02 July 2011

Friends

I do not agree with your considered views.

In order to capture section 80C deductions, the expenditure should be incurred from total income chargeable to tax. Hence the paymnet from loan taken will not be available for deduction. It is another matter that how will AO catch that.

Is it not so ?

KIYOSH (TAX CONSULTANT) (332 Points)
Replied 02 July 2011

AGREE WITH MR. TUSHAR SAMPAT

Ayushraj (Professional) (125 Points)
Replied 02 July 2011

TUITION FEES PAID FOR CHILDREN U/S 80C:

I have tried to cover each and every aspect on the issue, if anything is left, or you have different opinion than of what I have, please record in the comments.

Relevant part of the section 80c is reproduced here under.

"(xvii) as 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) "

"(4) The persons referred to in sub-section (2) shall be the following, namely:

(a) ......................
b) .......................

c) for the purposes of clause (xvii) of that sub-section, in the case of an individual, any two children of such individual.

on the basic of above following points are to be noted .

Deduction for tuition Fees is available up to Rs.100000 /-

The limit of one lac as above is total limit u/s 80C for all type of savings ,plus section 80CCC(pension policy) plus u/s 80CCD(Contributory Pension Plan).Means the aggregate amount of deduction under above referred sections can not exceed Rs. 1,00,000.
The deduction is available to Individual Assessee and not for HUF.
The Deduction is available for any two children.
This the only clause u/s 80 C where assessee can not claim tax benefit for expenditure done on himself. Means if assessee has paid tuition fess for his studies ,he will not be eligible.
Deduction is not available for tuition fees paid for studies of spouse.
The deduction is available for Full Time courses only,so no deduction for part time or distance learning courses.(This is my opinion but point is not very clear)
The fees should be paid to university, college, school or other educational institution, so no rebate for private tuitions.
Tuition fees paid for coaching courses for admission in professional courses or any other type of courses are not covered as that fees is not paid for FULL time eduction.
The center mention above in point 8 must be situated in India,so location should be in India though it can be affiliated to any foreign institutes.
In This section tuition fees has a wide meaning than normal parlance ,means here tuition fees means total fees paid minus any payment towards any development fees or donation or payment of similar nature.so admission fees is also allowed.
In My Opinion Transport charges, hostel charges, Mess charges, library fees, scooter/cycle/car stand charges is not allowed.
Building fund or any donation etc not allowed.

Questions which are commonly asked regarding tuition fees eligibility u/s 80C are addressed hereunder.

Que: Can Mother claim the benefit of tuition fees paid for his son/daughter.

Ans: Assessee means both mother and father both can take the benefit u/s 80 C for amount paid by them respectively.

Ques: If a couple have four children, can they both claim fees for two children each?

Ans: Yes ,husband and wife both have a separate limit of two children each ,so they can claim deduction for 2 children each.

Ques:If a Couple has one child and paid a fees of 200000 rs can they both claim tuition fess 100000 each ?

Ans.: Yes ,they both can claim deduction for 100000 each subject to they have actually paid same amount .If husband has paid 1.50lac and wife has paid 50000 then husband can claim 100000 and wife can claim 50000.

Ques: Ram has paid tuition fees for his child 2000/- in February 2011 relates to period march to june 2011, how much amount he can claim deduction in assessment year 2011-12?

Ans: He can claim full 2000 rs in assessment year 2011-12 , as this deduction is available on the basis of payment and it may or may not be related to the period in which it has been paid.

Ques: Is Late fees paid with tuition fees is eligible for deduction?

Ans: No,late fees is not eligible for deduction.

Ques: Is tuition fees admissible for pre nursery class also?

Ans: pre-nursery, Play school and nursery class fees is also covered under section 80C (circular 9/2008 & 8/2007)

Ques: Ram has paid Rs 36000 (Rs 8000 admission fees, rs 5000 development fees rs 5000 caution money, Rs 12000 annual charges and rs 6000 @ rs 2000 per month for april-june 2011 fees) in dec 2010. how much he can claim reimbursement as well rebates/deductions in 2010-11 and 2011-12.

Ans: As explained hereinabove, tuition fees meaning is wide in income tax as generally perceived, so in my opinion admission fees Rs 8000, 12000 annual charges and 6000 fees is covered for claim u/s 80C. Development fees is not allowed and caution money, as it is refundable amount, hence not allowed. You can claim the tuition fees on payment basis whether relates to this financial year, old or coming financial year.

ques: Are there any particular educational courses for which income tax exemption is given?

Ans: No specific course defined in the Income tax act ,but course should be in India and a full time course.

Hope this satisfy’s the queries.

1 Like

RAVI KUMAR DINESH PRASAD (ACCOUNT ASSISTANT) (26 Points)
Replied 02 July 2011

if any person has taken loan for the study purpose, like colleage fees,ca course fees, MBA course Fees etc (treated as tuition fees ). Then loan taken for study purpose is mandatory to acive the Degree issued by approved institute etc, then in such case loan taken for study purpose is allowed Deduction U/S 80C UPTO THE FEES AMOUNT PAID TO THE RECOGNISED INSTITUTE. AND also INTEREST ON LOAN TAKEN FOR STUDY PURPOSE is Allowed Deduction U/S 80E UPTO 8 YEARS

RAVI KUMAR DINESH PRASAD (ACCOUNT ASSISTANT) (26 Points)
Replied 02 July 2011

Raju (Meger, Aquisi,Takeover) (Audit Assitant) (56 Points)
Replied 03 July 2011

FOR RESOLVING YOUR QUESTION FIRST OF ALL WE SHOULD KNOW WHAT IS THE CONDITION FOR SECTION 80 E : THAT IS LOAN SHOULD BE FOR THE HIGHER EDUCATION AND ONLY INTEREST IS ALLOWED ON THIS LOAN .

WE SHOULD THINK THIS THING IN THE BROADER SENSE , HOW CAN DEDUCT THE AMOUNT OF TUTION FEE FOR THE SAME STUDY FOR WHICH WE HAD TAKEN THE LOAN , WE CAN JUST TAKE THE DEDUCTION OF INTEREST OF THAT LOAN FROM OUR GROSS INCOME WHICH CALCULATED AS PER THE ACT WE CAN NOT CLAIM THE BOTH TUTION FEE AND INTEREST.

As per the income tax act 1961 section 80C the tution fee is eligible for the deduction but THIS IS ONLY ALLOWED WHEN IT IS PAID OUT OF YOUR GROSS TOTAL INCOME CACLCULATED AS PER INCOME TAX ACT , IN OTHER WORDS OR IN OTHER SENSE WE CAN SAY AMOUNT YOU PAID FOR THE TUTION FEE IT SHOULD BE ACCORDING TO MENTION CONDITION AND WOULD BE ELIGIBLE IF YOU HAD NOT TAKEN ANY LOAN REGARDING THAT STUDY .

Thanks

Rup Kumar (finance manager) (288 Points)
Replied 03 July 2011

Yes, Payment of tution fees out of Education loan is eligible for deduction u/s 80C..

Moreover the payment of interest for eduction loan is also eligible for deduction U/s 80E.

Sangeetha Ajith (CA Final) (97 Points)
Replied 03 July 2011

I think this cant be claimed under 80C.As per IT act expenditure or investments incurred from gross total income can only claim under 80C.loan is not our income.then how can we claim this amount under 80C.