Education expenses can get you tax benefits

In order to promote education, the government provides benefits to individual taxpayers in respect of certain expenses incurred by them for education. Let us discuss these tax benefits.
Tuition fee for children
You can claim deduction up to Rs 1.50 lakh every year for tuition fee paid for full-time education of your children in India. A taxpayer can claim this deduction only in respect of two children. In case you have more than two children, your earning spouse can separately claim deduction for other children. This tax benefit is available by way of deduction with other eligible items like provident fund contribution, Public Provident Fund, repayment of principal of home loan, life insurance premium, National Savings Certificate, Equity Linked Savings Scheme, etc. The educational institution has to be situated in India to be eligible for this benefit.
Since this benefit covers expenses for full-time education only, payments made to coaching classes are not eligible for this benefit. Parents can You can claim this benefit irrespective of whether your child is financially dependent on you or not.
This deduction is available for tuition fee only and any payment in the nature of donation or development fee paid to the educational institution is not eligible for this benefit. In case the fee for even one child exceeds the eligible amount of Rs 1.50 lakh in a year, the other spouse can claim the deduction in respect of the balance amount for the same child within the available limit of Rs 1.50 lakh.
Interest on education loan
In addition to tuition fee paid, you can also claim deduction under Section 80E for interest paid for education loan taken for higher education of some specified relatives. Higher education for this purpose means any educational course undertaken after completion of SSC. You can claim this benefit for education loan taken for yourself, your spouse, children, or a child for whom you are a legal guardian.
This deduction is available for eight consecutive years starting from the year in which you start paying interest. It is available on payment basis. So in case of payment of arrears of interest in a year, the benefit is available for full interest paid during the year, irrespective of the year to which the interest paid pertains.
There is no limit on the quantum of deduction available for interest. This benefit is available even for education loan taken for part-time course anywhere.
The education loan for availing this benefit has to be availed from a financial institution or an approved charitable institution in India. The financial institution includes bank or any other institution approved by the government. The charitable institution should likewise be recognised by the central government. So if you borrow from your friends or relatives for your education, you cannot claim this deduction for interest paid to them.
Employer-provided allowances
In addition to the above benefits available to all individual tax payers, whether salaried and self-employed, tax laws also allow exemption for certain allowances received by employees from their employer.
An education allowance up to Rs 100 per month per child for two of your children is fully tax-free. Likewise a hostel allowance received and spent by you is exempt up to Rs 300 for each child, for up to two children. You can claim these exemptions only if your employer provides you such allowance separately as part of your salary