Tax Benefits on School Fees: Claiming Education Expenses

Can you claim tax benefits on school fees? What is the mandate? What is the limit? Which section does this fall under? We are sure, as parents, you have a lot of questions making you anxious!

Educating your child is one of the most rewarding investments you will ever make, but there is no denying that it comes with a significant price tag. From nursery admissions to high school graduations, the costs of quality schooling can put a strain on even the most well-managed household budgets.

However, many parents are unaware that the government provides a silver lining in the form of tax relief. If you are navigating the complexities of financial planning for the upcoming academic session, understanding how to leverage tax benefits on school fees in India is essential. We are here to simplify this complex topic in a way every parent understands!

The Power of Section 80C

The most significant avenue for claiming education expenses tax deduction is Section 80C of the Income Tax Act. While most people associate this section with life insurance or Public Provident Fund (PPF) deposits, it also covers the tuition fees you pay for your children.

• The Upper Limit: You can claim a deduction of up to ₹1.5 lakh per financial year. It is important to remember that this limit is shared with other 80C investments like ELSS or home loan principal repayments.
• The “Two-Child” Rule: This benefit is restricted to the tuition fees of up to two children per individual taxpayer.
• A Benefit for Both Parents: Here is a pro-tip for working couples—since the limit applies to individuals, both parents can claim the deduction for two children each.

If you have three or four children, or if the fees for one child exceed the ₹1.5 lakh limit, you can strategically split the payments and claims to maximise your income tax relief on school fees.

What Exactly Can You Claim?

One of the biggest “nitty-gritties” parents struggle with is identifying which part of the school bill is actually deductible. Schools often provide a consolidated bill that includes transport, mess charges, and library fees, but the tax department is very specific.

• Tuition Fees Only: Only the core “tuition fee” component qualifies for the deduction. This is the fee paid for the actual instruction and academic services.
• The Exclusions: Expenses like development fees, transport charges, hostel stays, mess fees, or late payment penalties do not qualify. Similarly, one-time “donations” or capitation fees paid during admission are strictly excluded.
• Nursery and Preschool: Many parents assume the benefit only starts from Class 1. In reality, tax benefits on school fees in India extend to full-time playgroups, nursery, and kindergarten sessions, provided the institution is recognised.

Diving Deeper: Higher Education and Other Allowances

It is a common misconception that these benefits vanish once your child finishes school. In fact, Section 80C covers “full-time education,” which includes everything from university degrees to post-graduation courses, as long as the institution is based in India. This means that as your child transitions from a “tiny tot” to a college student, you can continue claiming education expenses tax deduction on their tuition fees.

Furthermore, salaried employees should look beyond just Section 80C. Many organisations offer a “Children’s Education Allowance” (CEA) as part of the salary structure. While the amount—₹100 per month per child for up to two children—might seem modest compared to modern fees, it is an additional layer of income tax relief on school fees that is separate from the 80C limit. When you add the “Hostel Expenditure Allowance” of ₹300 per month, these small exemptions start to build up.

Strategies for High-Value Tuition Costs

If you are paying high fees that exceed the ₹1.5 lakh limit, or if you have more than two children, you need a strategy. Since both parents can claim for two children each, a family with three children can have one parent claim for two and the other for the third.

This essentially doubles your “child capacity” for tax purposes. Additionally, if the tuition fee for a single child is ₹2.5 lakh, one parent can pay ₹1.5 lakh and the other ₹1 lakh, allowing both to claim their respective portions (up to their individual 80C limits).

Another advanced tactic involves the use of Section 80E for higher education. Once your child moves into professional courses, you can take an education loan. Unlike Section 80C, Section 80E allows you to deduct the entire interest component of the loan with no upper cap for up to 8 years. By combining 80C for the principal/tuition and 80E for the interest, you create a robust tax shield that significantly lowers the net cost of a degree.

Eligibility and Documentation

To ensure you are successful in claiming education expenses tax deduction, you must meet certain criteria and maintain proper paperwork.

• Full-Time Education: The deduction is only available for full-time courses. Part-time or distance learning programmes do not qualify.
• Geographic Constraint: The school or university must be situated in India. Fees paid to foreign institutions for studies abroad cannot be claimed under Section 80C.
• Payment Basis: The deduction is allowed on an “actual payment” basis. This means if you pay the fees for the next academic year in advance during March, you can claim it in the current financial year.

For salaried individuals, the process is relatively straightforward. You simply need to submit the school’s fee receipts to your HR or finance department during the annual investment declaration. If you are self-employed, you can claim the amount directly under Schedule VI-A while filing your Income Tax Return (ITR).

The New vs. Old Tax Regime

A critical factor to keep in mind for the 2026 academic session is your choice of tax regime. Income tax relief on school fees via Section 80C is only available if you opt for the Old Tax Regime. The New Tax Regime offers lower tax rates but does away with almost all deductions, including tuition fees. If your primary goal is to lower your taxable income through your child’s education costs, a quick comparative calculation is necessary to see which regime saves you more.

An Afterword

By now, you are aware of all the requisites to successfully claim tax benefits on school fees. We dived deep into this topic as it is an essential checklist for all parents eager to provide the best education to their children while also ensuring that they rightfully save taxes.

By staying informed and keeping your receipts organised, you can transform a necessary expense into a powerful tool for your family’s financial wellness. It’s all about making your hard-earned money work just as hard for you as you do for your child’s future.

The Billabong High School of Innovation

We are honoured to be recognised among the Best CBSE and Cambridge Schools. This reputation is the result of years of dedicated research, unwavering commitment, and a deep-seated passion for nurturing young learners.

At the core of our educational approach is the “School of Innovation” philosophy—it is the pulse of our classrooms, moving education beyond traditional methods to ignite curiosity and build 21st-century resilience. Choosing Billabong High means joining a community focused on holistic development, where we empower every student to become a confident lifelong learner and a responsible global citizen.

At Billabong High International School, we are committed to excellence across every academic discipline. We invite you to visit us and discover how we inspire children to reach their full potential as kind, self-assured individuals.