Section 10(14) of the Income Tax allows exemption from taxable income in respect of Children education allowance and Hostel Allowance. Also, Section 80C allows deduction from taxable income in respect of Tuition Fee for children. Let’s find out how you can save tax with tuition and hostel fees

As per section 10(14), tuition fees can be claimed as an exemption

  • with a limit of INR 100 per child per month

  • for up to 2 children

  • with a maximum deduction of INR 1200 per year per child

  • by both parents for 2 children each

  • if you are receiving Child Education Allowance from your employer

Income Tax with School fee
Income Tax with Hostel Fee

As per section 10(14), Hostel fees can be claimed as an exemption

  • with a limit of INR 300 per child per month

  • for up to 2 children

  • with a maximum deduction of INR 3600 per year per child

  • by both parents for 2 children each

  • if you are receiving Hostel Expenditure Allowance from your employer

As per section 80C, Tuition fee can be claimed as a deduction

  • with a limit of INR 1.5 lakhs

  • for up to 2 children

  • by both parents for 2 children each

Income Tax with Tuition Fee
Deduction on Tuition Fee

Section 80C – Deduction on Tuition Fee – Conditions for eligibility

  • Allowed only for full-time courses

  • Only tuition fees is allowed as a deduction

  • Applicable only to Indian Schools and Universities

  • The next period is Jan 22 to Dec 25

With tuition and hostel fees, you can get

  • deduction under Section 80C for up to 1.5 lakhs on tuition fees

  • exemption under Section 10(14) for up to 2400 on school fees

  • exemption under Section 10(14) for up to 7200 on hostel fees

Tuition fee Income Tax

Now, let’s use the income tax calculator to see how much tax you can save with school and hostel fee for your children.

Step 1: Open the Income Tax Calculator

Step 2: Key in your salary details

Salary Earnings
Salary Deductions

Step 3: Declare your investments

Declare investment

Step 4: Now, calculate income tax

Compute

As per the calculation, you have a total tax liability of INR 140001

Step 5: Declare your Education Expenses

Child Education Allowance
Hostel Allowance
Section 80C Children's Education

Step 6: Specify the number of children

Personal Declaration

Step 7: Calculate Income Tax again

Calculate income tax

As you see, the total tax liability has come down to INR 99137

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Calculate your Income Tax with data from your payslip

Open Income Tax Calculator

As you see, you can make tax savings for upto INR 40864 with school and hostel fee for your children. If you have 4 children, you and your spouse can claim benefit for two children each. Remember to save school and hostel fee receipts.