Students: Can you claim tax exemption on tuition fees?

Are you a student paying tuition fees from your own pocket? In this case, are you eligible for getting a tax exemption on your tuition fees?

Under what conditions can you claim a tax exemption on your tuition fees?

In a chat with readers on June 26, Get Ahead tax expert Mahesh Padmanabhan answered these and many more queries related to the deadline for filing tax returns for 2006-07, gift tax and ideal investment vehicles for 2007-08.

Vipps asked, I am a salaried individual working in the NCR region. For the past three years I have been filing my IT returns in Dehradun, as my PAN card was applied and issued to me from there. Now, this time, the IT officials have sent a circular to all the CAs of Dehradun that for individuals having Housing Loan more than Rs 10 lakhs would essentially attract a scrutiny. Incidentally, I have taken a housing Loan of Rs 17 lakhs in FY2006-07, for which my CA has suggested me to get my IT return filed in NCR. As there is a tax refund due to me in this IT return, will there be any hassles/problems if I file my IT return in the NCR region? Also, please explain to me the procedure for the same.

Mahesh Padmanabhan answers, If you have shifted permanently to the NCR region, then you could get the PAN data updated by applying with NSDL/ UTISL for such an address change. Thereafter, you could submit your returns at the local ward.

simmy asked, What is a gift tax and what is the rate of interest. If one gives Rs 5 lakhs to his nephew, does it comes under gift tax?

Mahesh Padmanabhan answers, Gift tax is part of the Income Tax Act, and such tax is levied on the recipient of the gift provided certain conditions are breached. In your case, gift to your nephew would not be taxable in his hands.

111 asked, I am always in confusion about how to calculate Tax? What is the best investment to avoid IT?

Mahesh Padmanabhan answers, Tax investments generally have a predefined set of instruments to be invested in. Debt instruments include PPF, NSC, LIC, etc, and equity instruments include ELSS, MFs, ULIPs, etc.

Based on your risk appetite, you could go ahead and invest in any of these instruments. The most preferable thing to do would be to consult your tax consultant or financial planner to get a hold on the right mix of investing.

karthikraja asked, Hello Mahesh, I am a salaried person and doing MBA (distance). Can I claim tax benefit on my tuition fee?

Mahesh Padmanabhan answers, The tax benefit under section 80C for tuition fees paid is available only towards full time education for any two children of an individual. Hence, tuition fees for part time education or for self education is not eligible.

bhaskar asked, I am a salaried person. Is PF included in the Rs 1 lakh rebate under 80c?

Mahesh Padmanabhan answers, Yes it is included within the overall ceiling of Rs 1 lakh under section 80C.

Sen asked, Hi, I haven't received tax refund for the year 2004-05 which I filed in 2005. What should I do? My auditor is telling it's not yet processed and no one in tax office is responding.

Mahesh Padmanabhan answers, The assessment for the year 2004-05 might have been completed already. You could approach the PRO in the income tax office and officially submit a letter seeking the status on such refund. You could thereafter follow up for the response or use the RTI act to get status information.

Nilesh asked, Can I gift my brother Rs 5 lakhs in cash? Will it be taxable at anybody's side?

Mahesh Padmanabhan answers, No, gift tax is not applicable on this transaction.

RAVI asked, What is the last date to file tax returns?

Mahesh Padmanabhan answers, As of now, for individuals without tax audit, the date is July 31, 2007.

Part II: Filing tax online? Think twice

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