Tag: Tuition Fees

How to Reach the ₹1,50,000 Section 80C Limit Without New Investments

Posted on by CA Meet Dhrangadhariya

Last updated: 30 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • You may already be near the ₹1.5 lakh section 80C limit through payments you make anyway: EPF, life insurance premium, home loan principal, children’s tuition fees, and stamp duty on a house.
  • Add up these items first, then invest only the gap, if any.
  • Section 80C is available only in the old tax regime and is section 123 of the Income-tax Act, 2025 from Tax Year 2026-27.
  • Declare the items to your employer in Form 124 (earlier Form 12BB) so TDS is adjusted.

How to check your 80C position

1. Note your EPF contribution for the year
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2. Add home loan principal repaid and stamp duty if you bought a house
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3. Add children’s tuition fees (up to two children)
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4. Add life insurance premiums that qualify
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5. Subtract the total from ₹1,50,000 and invest only the balance

Every March someone suggests that you must invest in a tax-saving scheme to use up section 80C. Before you do, check what you have already paid during the year. Many ordinary payments qualify, and you may have used most of the ₹1,50,000 limit without any new investment.

Section 80C works only in the old tax regime. From Tax Year 2026-27 it is section 123 of the Income-tax Act, 2025, with the same ₹1.5 lakh limit.

Step by step

  1. Employees’ Provident Fund. Your own contribution to EPF during the year counts. Check your salary slip or EPF passbook. For many salaried people this alone is a large amount.
  2. Home loan principal. The principal part of your EMIs counts. Your lender’s certificate shows it.
  3. Stamp duty and registration. If you bought a house, the stamp duty and registration charges paid in that year count.
  4. Children’s tuition fees. Tuition fees for full time education of up to two children in India count, including playschool and preschool fees if they are tuition fees. Development fees, donations and transport do not.
  5. Life insurance premium. Premiums on a policy for yourself, your spouse or your children count. The premium should be within 10% of the sum assured for policies issued after 31/03/2012 (15% for a disabled person or specified diseases).
  6. Employee’s NPS contribution under section 80CCD(1) also counts within the same limit.
  7. Add them up and subtract the total from ₹1,50,000. The result is the balance of the limit.
  8. Invest only the balance, if any, in a product that suits your risk and your time horizon, such as PPF, ELSS, NSC, a 5 year tax-saver FD, Senior Citizens’ Savings Scheme or Sukanya Samriddhi Yojana.

Example

Priya’s EPF contribution is ₹72,000. She repaid ₹48,000 of home loan principal and paid ₹20,000 of tuition fees for one child. The total is ₹1,40,000, so only ₹10,000 of the limit is left. She does not need to invest ₹1.5 lakh in ELSS.

Who can claim?

Individuals (resident or non-resident) and Hindu undivided families can claim section 80C. Companies, firms and LLPs cannot.

How to claim

Give your employer a declaration in Form 124 (earlier Form 12BB) with proofs, so that less TDS is deducted. EPF is usually already known to the employer. If you did not declare it, you can claim the deduction when you file your return, as long as you are in the old regime and file on time.

What not to do

  • Do not buy a product only because the limit is unfilled. Choose it for the return, lock-in and risk.
  • Do not forget that a home loan principal or stamp duty claim is reversed if you sell the house within five years of getting possession.
  • Do not assume this works in the new tax regime. If you move to the new regime, 80C is lost altogether, so compare your total tax first.

Frequently asked questions

Can I reach the section 80C limit without investing?

Often, yes. EPF, life insurance premium, home loan principal, tuition fees and stamp duty can already add up to ₹1.5 lakh.

Do I need to invest more once the limit is reached?

No. The deduction is capped at ₹1.5 lakh, so extra investment under 80C does not reduce tax further.

Is my EPF counted?

Yes, your own contribution to the Employees’ Provident Fund counts.

Which tuition fees count?

Tuition fees for full time education of up to two children in India. Development fees and donations do not count.

Is 80C available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Children Education Allowance, Hostel Allowance and Tuition Fee Tax Benefits

Posted on by CA Meet Dhrangadhariya

Last updated: 11 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • From 01/04/2026 children education allowance is exempt up to ₹3,000 a month per child and hostel allowance up to ₹9,000 a month per child, for up to two children, in the old tax regime only.
  • Up to FY 2025-26 the limits were only ₹100 and ₹300 a month per child.
  • Separately, tuition fees for up to two children can be claimed under section 80C (section 123 of the Income-tax Act, 2025), within the ₹1.5 lakh limit, in the old regime.
  • Neither benefit is available in the new tax regime.

Salaried parents can get two separate tax benefits for their children’s education: an exemption on the children education allowance and hostel allowance their employer pays, and a deduction for tuition fees under section 80C. Both need the old tax regime.

Children education and hostel allowance

Up to FY 2025-26 these were exempt under section 10(14)(ii) of the Income-tax Act, 1961 and Rule 2BB. From Tax Year 2026-27 they are in Schedule III (Table Sl. No. 13) of the Income-tax Act, 2025, with the amounts in Rule 280(2) of the Income-tax Rules, 2026.

Allowance Up to FY 2025-26 From 01/04/2026
Children education allowance, per child per month ₹100 ₹3,000
Hostel expenditure allowance, per child per month ₹300 ₹9,000
Number of children Two Two

So for two children, the annual exemption from 01/04/2026 is up to ₹72,000 for education allowance and up to ₹2,16,000 for hostel allowance. Both apply across India and need the allowance to be actually paid by the employer. The exemption is not more than the allowance received.

The new limits apply only to the old tax regime. Under section 202 of the Income-tax Act, 2025 and Rule 280(3), the new regime does not allow these exemptions.

Tuition fees under section 80C

  • Tuition fees paid to a university, college, school or other educational institution in India for the full-time education of up to two children qualify under section 80C, within the overall ₹1.5 lakh limit. From Tax Year 2026-27 this is section 123 of the Income-tax Act, 2025.
  • Development fees, donations, transport, uniform, stationery and similar charges do not qualify.
  • Part-time courses and fees paid for yourself, your spouse or other relatives do not qualify. Fees paid to an institution outside India do not qualify.
  • The fee must have been paid in the year.

Example

Ms R has two children, one in a day school and one in a hostel. Her employer pays children education allowance of ₹3,000 a month for each child, and a hostel allowance of ₹9,000 a month for one child. In FY 2026-27 she can exempt ₹72,000 education allowance and ₹1,08,000 hostel allowance in the old regime. If she also pays ₹40,000 as tuition fees, she can claim that under section 123 along with her other 80C investments.

How to claim

  • Give your employer the fee receipts and the declaration in Form 124 (earlier Form 12BB) so the exemption and deduction are allowed while calculating TDS.
  • If you could not, claim them when you file your return. Salaried parents claim the allowance in the salary schedule and the tuition fees in the deductions schedule.
  • Non-salaried parents can claim only the tuition fee deduction.

Frequently asked questions

What is the children education allowance exemption now?

From 01/04/2026, ₹3,000 a month per child, up to two children, in the old tax regime. Up to FY 2025-26 it was ₹100 a month per child.

What is the hostel allowance exemption?

From 01/04/2026, ₹9,000 a month per child, up to two children. Up to FY 2025-26 it was ₹300 a month per child.

Can I claim both the allowance and tuition fees under 80C?

Yes. They are separate benefits: the allowance is an exemption on salary, and the tuition fees are a section 80C deduction.

Does 80C cover school development fees or donations?

No. Only tuition fees for full time education in India, for up to two children.

Are these available in the new tax regime?

No. Both the allowances and the 80C deduction need the old regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.