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Of tuition fees and service tax

RelaxWithTax | May 09, 2006

You have a question about house rent allowance, medical allowance, or even a general tax query.

Here's where we step in with our experts, Relax With Tax.

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I'm an MBA student. I recently got a mail from our college saying that 10.2% service tax is applicable on the fees paid by us. This additional amount is amounting to around Rs 24,000.

My college is run by a trust and is not registered with AICTE nor affiliated to any university.

- Jitendra 

Any institute or establishment which issues a certificate/ degree or any educational qualification recognised by the law is not covered under the service tax net.

Hence, in your case, if the degree offered by your institute is recognised under the law, then such a course would not be liable to service tax.

What comes under tuition fee (Section 80C)?

Is only the tuition fee component (shown separately in the fee receipt) considered for deduction in the fees paid by me for my son?

Or, the entire amount of the fees which I am paying as a school fee?

I am not referring to any payment to the school fund or donation or any special payment which is paid for any special participation activity or extra curricular activity.

But what about the other fees such as computer fees, day school fees, compulsory activity fees, term fees, and lunch fees?

- B Praveen

No payment/ fees other than tuition/ term fees are eligible for deduction under Section 80C as per the Income Tax Act.

Generally, the receipt for school fees shows the tuition fees as 'term fees'. Only this needs to be considered. 

Activity fees, library fees and fees for extra curricular activity are not directly linked to the tuition/ education payment.

To see the other queries answered by our tax expert, read How is bonus taxed?

Got a question for Relax With Tax? Please write to us!

Note: Questions may be edited for brevity. Due to the tremendous response, all queries will not be answered.

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Illustration: Dominic Xavier

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