This is the time of the year when you will find taxpayers brainstorming to find ways to save their hard-earned money from the clutches of income tax. But little we know about the available options of income tax deductions.
The Section 80C of the Indian Income Tax Act is presented with plenty of options on tax benefits. All we just need to do is to know the rules properly. Apart from life insurance premiums, public provident fund deposits, and equity linked savings schemes, there are also some other ways too that can help you from shelling out more to the exchequer.
Very few of us really know that it is possible to enjoy a tax deduction of up to 1 Lakh INR on the ground of money being spent on our kids’ education. The deduction is only for tuition fees paid for your children. In case you or your spouse is also undergoing an educational course and paying the tuition fees, no benefit under this section can be availed.
However, this scheme is only for individual assessees. Hindu Undivided Family (HUF) cannot claim tax deductions under this section. More to this, you are allowed to claim for deductions for the school fees paid only for two children. If you have more than two kids, you have choose any two of them. Nevertheless, if your spouse is also a taxpayer, he/she can also enjoy the tax benefit for two more children.
There are also some strict guidelines stating the courses that will come under this exemption. Only full time engagements in schools, colleges, or universities are included, while payment of private tuition fees is not entertained. Also any sort of donations, development fee, hostel/mess/library charges are not included under this section.
Suppose your child’s tuition fee is 2 Lakhs INR per annum. Now, if both of you and your spouse are individual assessees, two of you can enjoy an income tax exemption for 1 Lakh INR each. Keeping an eye on the escalating tuition fees, as claimed by the private educational institutions, this option is surely going to keep your frowns upside down this March.