Tax benefits on a child’s education fees can put a smile on the face of many parents who are currently struggling with the growing expenditure on quality education for their kids. Are you an anxious parent struggling with the payment of school fees or missing out on possible benefits? This article tries to explain taxation provisions available in India in easy words while also providing tips on how to handle your finances in a manner that provides maximum value for your child’s education. So, let's now proceed to these benefits and how you use them.

What Are the Tax Benefits of Child Education Fees?  

Parents in India can take advantage of several tax benefits to ease the financial burden of their child’s education. One of the most significant benefits is the deduction available under Section 80C of the Income Tax Act. This allows parents to claim up to ₹1.5 lakh annually for tuition fees paid for a maximum of two children, provided the payments are made to recognized educational institutions in India. However, this deduction applies strictly to tuition fees and does not include additional expenses such as development fees, donations, or fees for private coaching.

In addition to tuition fee deductions, parents can also claim relief through the Children’s Education Allowance. This allowance provides an exemption of ₹100 per month for each child, up to two children, helping to offset basic schooling expenses.

Together, these provisions are intended to help families manage education-related expenses while also reducing their overall tax liability, making quality education more accessible.

Key Tax Benefits for Child’s Education in 2025

Parents can claim tax deductions on tuition fees under Section 80C of the Income Tax Act. Additionally, education loans qualify for tax benefits under Section 80E, covering the interest paid are:

1. Children’s Education Allowance (CEA)

The Children’s Education Allowance is available under Section 10(14) of the Income Tax Act. This exemption is designed to reduce the financial burden of school fees.

• Amount: ₹100 per month per child for up to two children.
• Eligibility: Only applicable for children studying in recognized educational institutions in India.

This allowance is a small but meaningful way to cover basic school-related expenses.

2. Hostel Expenditure Allowance

If your child resides in a hostel, you can claim an additional tax exemption for their boarding and lodging expenses.

• Amount: ₹300 per month per child for up to two children.
• Eligibility: Available for children living in hostels affiliated with Indian educational institutions.

These allowances cumulatively offer a small yet effective reduction in taxable income.

3. Tax Deduction on Tuition Fees (Section 80C)

The most significant tax relief is available under Section 80C of the Income Tax Act, which allows deductions on tuition fees.

• Deduction Limit: ₹1.5 lakh annually under Section 80C (includes all eligible investments and expenses).
• Eligibility:
• • Fees must be paid for a maximum of two children.
  • The institution must be in India (schools, colleges, or universities).
  • Only the tuition component of the fees is deductible.

Example: If you paid ₹60,000 as tuition fees for your child in the financial year, you can claim this amount under Section 80C, reducing your taxable income by ₹60,000.

Expenses Not Covered Under Section 80C  

Under section 80C of the Income Tax Act, parents could be entitled to a tax deduction for the tuition fees paid in regard for a child's education. It is noteworthy, nevertheless, the several out-of-pocket costs not covered by the claims. Section 80C's claim is applied especially to tuition costs and excludes any of the following expenses:

• Development Fees: Charges levied by educational institutions for infrastructure development are not eligible for deduction.
• Donations or Capitation Fees: Any voluntary contributions or mandatory capitation fees paid to secure admission are excluded.
• Private Coaching Fees: Payments made towards private tuition or coaching classes outside the regular school curriculum do not qualify.
• Hostel and Mess Charges: Expenses incurred for a child's accommodation and meals are not covered under this deduction.
• Library Fees: Charges for library facilities provided by the institution are excluded.

However, it is important to adhere to this limitation in the realm of taxation law in India, as it only applies to the tuition fees that are offered for all courses that are pursued in one of the institutes offered in India. This is with regard to the fact that even the number of children whose tuition fee may incorporate for any tax benefit is limited to two per ordinary taxpayer. For this reason, parents need to distinguish between other educational expenses as well as tuition fees so as to avoid any misapplication of the deduction.

Additional Tax Benefits Related to Child’s Education  

For parents who have borrowed for the higher education of their children, all the interest paid will qualify for deduction under Section 80E. This deduction shall apply for a period of eight years or until repayment of the entire loan is made, whichever is earlier. The limitation for deduction is indefinite, and therefore, those aspiring to higher studies will find it a very useful provision.  

1. Education Loan Interest Deduction (Section 80E)  

For parents who have borrowed for the higher education of their children, all the interest paid will qualify for deduction under Section 80E. This deduction shall apply for a period of eight years or until repayment of the entire loan is made, whichever is earlier. The limitation for deduction is indefinite, and therefore, those aspiring to higher studies will find it a very useful provision.

2. Sukanya Samriddhi Yojana (SSY)  

Investments made under Sukanya Samriddhi Yojana (SSY) qualify for tax benefits under section 80C for parents who have girl children. The scheme is not only beneficial in covering the educational expenses of your daughter but also provides tax-free interest and maturity earnings.

How to Claim Tax Benefits on Child’s Education Fees  

Claiming these benefits is straightforward:

• For Salaried Individuals: Submit fee receipts to your employer as part of the investment proof process. Declare these in Form 12BB while filing taxes.
• For Non-Salaried Individuals: Include tuition fees under Section 80C in your income tax return (ITR). Maintain fee receipts for records, but submission isn’t mandatory.

Maximize Tax Savings While Supporting Your Child’s Education  

Strategic planning can help you leverage all available tax benefits effectively. Parents can:

1. Claim deductions under Section 80C for tuition fees of up to two children.
2. Utilize hostel expenditure allowances for children staying in hostels.
3. Claim interest deductions on education loans for higher education.

Additionally, ensure that the educational institution is recognized and based in India to qualify for these benefits.

How Invest4Edu Helps You Save While Investing in Their Future?

Invest4Edu offers a comprehensive approach to help you save and invest in your child's education, while also taking advantage of the tax benefits available under Indian tax laws. Here’s how Invest4Edu can assist you:

1. Tailored Education Planning: Invest4Edu provides personalized advice to help you plan for your child's education, aligning with your financial goals and timelines. This ensures you can save efficiently while benefiting from tax-saving instruments.
2. Tax-Saving Mutual Fund Investments: Through Systematic Investment Plans (SIPs) in mutual funds, Invest4Edu helps you build wealth for your child's education. Many of these investments come with tax benefits under Section 80C, allowing you to save taxes while growing your savings.
3. Education Loan Support with Tax Deductions: If you need an education loan to fund your child’s studies, Invest4Edu guides you in securing loans with favourable terms. The interest on education loans qualifies for tax deductions under Section 80E, making it an ideal option for tax-saving.
4. Financial Literacy and Tax Planning: Invest4Edu educates you on various tax-saving schemes that can help you plan better for your child's education. By understanding the available tax deductions, you can make informed decisions and maximize your savings.
5. Study Abroad Tax Benefits: For families planning to send their children abroad for studies, Invest4Edu provides guidance on education loans for international studies, along with tips on how to leverage tax deductions on these loans under Section 80E.

Conclusion

Among the greatest asset investments, education ranks at the top for the potential it has for your child’s future. The tax reliefs about a child’s study fees not only reduce your financial load but also enable you to concentrate on giving the best opportunities to your child. Whether it is the tax allowances for tuition fees or hostel costs, there are many ways in which the Indian parliament helps parents with education costs.