New Delhi: Income Tax payers in India get children tax benefits under various sections of the Income Tax Act, 1961. Child tax deduction benefits can reduce tax burden on parents who are reeling with sky-high education expenses in the country. The Income Tax Returns (ITR) filing deadline for the financial year 2023-24 and assessment year 2024-25 is July 31, 2024. Time is running out! If you too are a parent and you haven’t yet filled taxes, then, here are some tax deduction benefits that you can avail on expense that you have made on your children in the previous fiscal. Lets see what are those children tax benefits.
Children Tax benefits:
Sukanya Samriddhi Yojana (SSY) tax benefits
Section 80C allows for tax deduction benefits of up to Rs 1.50 lakh on contributions made in the Sukanya Samriddhi Yojana (SSY). Parents can deduct their total taxable income equivalent to SSY contributions made for their girl child in that financial year.
Education Loan tax benefits
Parents can deduct interests they have paid on children’s’ education loan from their total taxable income. This children tax benefit can be availed under Section 80E of the I-T Act for first eight years.
Education fees
Parents can also deduct tution fees paid for their children’s’ education from the total taxable income they are liable to pay in that fiscal. This type of children tax benefit can be availed under Section 80C of the I-T Act. In last 10 years or so, education inflation has grown at average rate of 10-12 per cent. Parents have to incur high education fees of their children. This type of children tax benefits can provide some relief!
Children’s savings account interest tax benefits
Section 10(32) gives tax deduction benefits of up to Rs 1,500 per child on interest earned in savings accounts of that child. Amount equivalent to the interest earned in savings accounts of the child can be deducted from the total taxable income. Parents can avail of this deduction benefit in ITR filing 2024.
Health Insurance Premiums
Parents are allowed to deduct their total taxable income by up to Rs 25,000 for premiums paid on children’s’ health insurance policies. This type of children tax benefit can be availed under the Section 80D.
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