Tax-Savings: Deduction on children’s tuition fees is available only in the old regime of income tax. If you use the old regime, you can claim deduction on school or college tuition fees for up to two children. This will significantly reduce your tax liability
In the next financial year (2025-26), many taxpayers may decide to use the new regime instead of the old regime of income tax. The reason for this is the announcement for the new regime in the Union Budget on February 1, 2025. Finance Minister Nirmala Sitharaman has made income up to Rs 12 lakh per annum tax-free in the new regime. She has also made changes in the tax slabs in the new regime. If you have decided to use the new regime, then you will have to change your tax planning.
Deduction is available in the old regime of income tax
There is a greater need for tax-savings in the old regime of income tax. This is because deductions are available on many investments in this regime. Taxpayers who want to take advantage of these deductions will have to remain in the old regime. Such people can claim deduction by investing up to Rs 1.5 lakh annually under section 80C of the Income Tax Act, 1961. Under this section, deduction is also allowed on school-college tuition fees of two children.
Deduction only on school or college tuition fees
If your children are studying in school or college, you can claim deduction on tuition fees of up to two children. The limit for this is Rs 1.5 lakh. This is such a deduction that taxpayers do not have to make a separate effort to avail it. Most people pay the fees of their children. Tax experts say that this is such a deduction that every parent should claim. There is not much formality for this.
You can also claim deduction on play school fees
If your children study in playschool, crèche or nursery, you can still claim this deduction. You just have to keep in mind that you can claim deduction only on tuition fees. Deduction is not allowed on other school or college fees. For example, if you give capitation or donation to the school or pay for the school bus, then you will not be able to claim deduction on that.
What is the method to claim deduction?
If you do not want to miss the opportunity to claim deduction on tuition fees, then you will have to get a certificate of the total tuition fees paid to the school or college in a financial year. Many schools collect fees for the entire financial year by January. You can ask for a certificate of tuition fee payment from the school after paying the last fee in January. Private companies ask their employers to submit this certificate by mid-January. If you are self-employed or do business, then you can claim deduction on school fees while filing income tax return for this financial year. This will reduce your tax liability significantly.
