Know Tax Benefits for Students

Abdul Kalam felt strongly about the importance of investing in students for a nation to succeed.. Students are the backbone of any country and as a student Kalam faced many hardships.. His life took him to an unfortunate place in which he had to sell newspapers in order to gain the funds required to support his education. However, he persevered and was eventually able to attend top law school and study towards the goal of becoming a Constitutional Judge

To celebrate this talent, easytaxplanner has taken a small initiative to make you aware of the different tax benefits which you may be entitled to. These benefits include tax concessions or exemptions which are provided because of your student status and also the rebate on education loans on income tax within India.

Here are three major benefits that were taken into consideration to help students in our country. 

1. Income Tax deductions under section 80 E.

Higher education costs are making it so many Indians can’t afford to save up any money for emergencies. This prompted the government to introduce Section 80E, which allows anyone earning under a certain amount to invest in an insurance plan. Saving you and your family from medical crises that might otherwise wipe you out.

• Under this section an individual can avail the benefits of tax deductions if they take out a loan to fund their education.
• Subsection 80E of the Income Tax Act stipulates that this loan must be from a financial institution or a registered charity institution.
• This is only true for individuals, not for companies or HUFs.
• This deduction is only available for 8 years

2. Income Tax benefits under section 80 C.

Parents have always been entitled to Tax benefits when they’re making some sort of contribution to their children’s education. This is because tuition fees qualify them for tax deductions under Section 80C

• The tax benefits you can avail of under this Section can be up to 1.5 lakhs annually.
• A one-time Tuition Fee paid to any college in the academic session qualifies for tax benefit
• You can claim this tax benefit for a maximum of two children.
• It’s applicable on full-time education both in governments and non-governments, but it doesn’t need any application.

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

The Indian government has given tax exemptions to all salaried employees and those receiving the children’s education allowance. Many people are eligible for these exemptions as long as they follow the necessary guidelines.

• Education Allowance: If you get a fixed education allowance from your employer, you can avail tax exemptions of Rs. 100 /month per child (maximum 2 children).
• The Hostel Exemption Allowance (HEA) gives an exemption of Rs. 300/month for every child (up to two children) if the employer pays for their hostels. The HEA will not renew if the employer does not continue to provide hostel facilities.