School fees of kids eligible for tax deduction

"This deduction is up to Rs 1 lakh and falls under section 80C of the IT Act, and you can claim a deduction for fees paid for only two children," said Amit Dani, chartered accountant and certified financial planner.

In fact, this benefit could be availed for fees paid for your kids -- you can't avail it if you're paying your sibling, spouse or even for a course that you may have enrolled for. Only fees paid towards the education of two children qualifies. If you have more than two kids, and your partner is a tax payer, he or she can claim the tax benefit for the other child, again within the maximum limit of two children.

Keep in mind that only full time courses qualify for tax deduction. It does not matter which college, university or school it is, as long as it’s in the country. In fact, even pre-schools are covered, which is good, given the cost of private primary education has been rising rapidly.

"This deduction covers fees, not donations, establishment charges, or any other charges like hostel fee, or commutations, lab charges and the like," Dani said.

The cost of education, especially higher education, is rising quickly and there's a good possibility that both you and your spouse have had to shell out money to pay for your child's education. In such a case they can both claim within the limit of Rs 1 lakh each. So if your spouse pays Rs 1 lakh and you pay Rs 70,000, you both can claim the paid amount for tax deduction.

Of course, there are other options under section 80C which would help you get deductions, but if you have paid your child’s fees and haven't exhausted the other 80C tax savings instrument options, you might as well make the most of this tax benefit.