Thursday, February 18, 2010

Empowering individuals and parents

Vikas Vasal on Budget idea

Education deduction

  • Currently, the deduction available in respect of expense incurred on education of children is clubbed with other investment-related deductions U/S 80C of the Act. Further, any specific education allowance if paid by the employer is exempt up to Rs 100 per month per child for a maximum of two children.
  • Education is one of the key requirements of our country to grow and prosper. The very reason the government had levied education cess was primarily to collate and channelise funds for the education sector. It is imperative that education be encouraged by providing meaningful concessions/relief at the grass root level.
  • In this context, a separate deduction for expenses incurred on education up to Rs 2,500 per month per child for a maximum of two children would make economic sense. In order to bring in economic parity, this deduction may be restricted to individuals having annual income of less than Rs 10 lakh.
  • Further, instead of government subsidising schools and education institutions as at present, it is high time that the government empowers the individuals/parents to decide in which school/education institution their children should study. Therefore, education deduction, coupled with education vouchers, is probably the need of the hour.”

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