World Students’ Day 2019: Know Tax Benefits for Students


October 15, 2019; on the birth anniversary of APJ Abdul Kalam, let’s remember this great personality who inspired each one of us to think beyond our imaginations. On this fortunate day when the world, especially India was gifted with this great mind; the United Nations decided to observe his birthday as The World Student’s Day.

APJ Abdul Kalam was fond of students to an extent that he believed for a country to progress; it needs to focus on the betterment of students. According to him, students are the makers of the country. Kalam’s life as a student was full of hardships. He had witnessed a phrase in life wherein he had to sell newspapers to support his education. But his commitment gave him the strength to go against all odds and to reach to the highest Constitutional post in the Republic of India i.e. The President.

To pay respect to this unmatched talent Tax2win takes this small initiative to make the people aware of the different tax benefits which are provided for the student’s education by the Income-tax department of India.

Today, we throw light on three such major benefits which were introduced keeping in mind the welfare of the students of the country.

 

1. Income Tax deductions under section 80 E.

The rising cost of higher education made the majority of the masses of India to spend huge amount of their savings leaving them with no finances for medical and other emergencies. It was then that the government introduced Section 80E of the Income Tax act, 1961 to help the commoners.
  • Under this section an individual can avail the benefits of tax deductions if taken for a loan for higher education.
  • Section 80 E also mentions that this loan taken should be from a financial or charitable institution.
  • This deduction is applicable only for individuals and not for a HUF (Hindu Undivided Family) or a company/firm.
  • The deduction can be availed only for 8 yrs.

2. Income Tax benefits under section 80 C.

Tax benefits for parents have always been directly proportional to sending their kids to school. This happens so because tuition fee of children qualifies parents to gain Tax benefits under section 80 C.
  • The tax benefits availed under this section can be a whopping 1.5 lac annually.
  • Tuition fee paid at any time in the academic year to any registered school or college qualifies for tax benefit.
  • This tax benefit can be claimed for a maximum of two children.
  • It is applicable on full-time education in both government and non-government organization.

3. Tax Benefits on Children Education Allowance under section 10(14).

Indian government has given this privilege to all salaried individuals of the country and those receiving Children Education Allowance can avail tax exemptions on the following grounds of expense:
  • Children Education Allowance: If the individual receives a fixed education allowance from the employer then he can avail a tax exemption of Rs. 100 /month on each child (maximum 2 children).
  • Hostel Exemption Allowance: A tax exemption of Rs. 300/month can be availed per child (maximum of 2 children) if an allowance is paid by the employer for the children’s hostel facilities.

CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.