You Can Claim Deduction On Tuition Fee For Two Children Up To Rs 1.5 Lakh

You can claim deduction in respect of the fee paid for the higher education of your wife only if you take an education loan for the same. You cannot claim tax benefit on home loan for constructing a house if you are not the co-owner of the land. Shares received by your wife from her father will not be treated as income

Balwant Jain

Updated on: 2 December 2023 9:06 am

Claim Deduction On Tuition Fee For Two Children

My wife, who is a housewife, is pursuing her higher education. I am paying her college fees. I have paid Rs. 62,000 as her first year fees. Can I claim any tax benefit on her education fees?

Under Section 80C of the Income-tax Act, 1961, an individual can claim deduction for tuition fee up to Rs. 1.50 lakh for maximum of two children for full time education in India. The deduction for tuition fee can only be made for children, and no other relative.

So you will not be able to claim any deduction in respect of the fee paid for higher education of your wife. However, in case an education loan is taken for higher study of specified relatives, including spouse, an individual can claim deduction for the interest paid during the year under Section 80E of the Income-tax Act, 1961.

I am a housewife. My husband, who is a government employee, purchased a land in my name. We are planning to take a home loan from a nationalised bank for constructing a house on that plot of land. For this loan the bank is stipulating that I will be the borrower and my husband will be co-borrower. Can my husband claim tax benefits on this home loan?

The plot purchased by your husband in your name can be treated as gift made by him to you. For claiming income tax benefits in respect of a home loan, the person should both be a borrower and owner of the property. He may be the sole owner and sole borrower or he/she may be a co-owner and co-borrower. Though your husband is a co-borrower of the loan, but since he is not the owner or co-owner of the plot of land on which the house is proposed to be constructed, he will not be able to claim any tax benefit in respect of this home loan.

So, unless your husband also comes to partly own the property, he will not be able to claim the tax benefits under Section 80C (for loan repayment) and Section 24(b) (for interest payment on home loan).

So, you will need to transfer part of the plot in your husband’s name for him to be eligible to claim tax benefits on the home loan. Do note that the income tax benefit in the home loan shall be available in the ratio in which you and your husband will serve the loan. In case your husband becomes part owner of the plot through purchase and decides to service the entire loan, he can claim the benefits for the full loan.

My wife received share worth Rs.1.75 lakh from her father as a gift. What will be her tax liability on transfer of the share to her dematerialised account? Will this be treated as her income?

All the gifts up to Rs. 50,000 in aggregate received during the year are not treated as income for the recipient. But once it crosses the threshold limit of Rs. 50,000, the entire value of the gift becomes taxable in the hands of the recipient.

However, any gift received from specified relatives, including parents, is exempt under Section 56(2) (X) of the Income-tax Act, 1961. Thus, the shares received by your wife from her father will not be treated as her income.

The author is a tax and investment expert

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)