Filing ITR for Tution income
Learn about taxability of tution income, applicable ITR form, tax rates, how to save taxes, Documents required and how to file ITR
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With the rapid advancements in education and technology, traditional study habits among children are undergoing significant changes. These days, both parents and students are increasingly opting for alternative learning methods, such as private home tuitions, private tuition centers, or online tutoring sessions. This shift is driven by the desire for personalized and flexible learning experiences that can cater to individual needs.
As a result, many individuals have taken up providing private home or online tuitions as their primary profession, while others engage in tuition work on a part-time basis to supplement their income. This trend has led to a growing community of educators who are capitalizing on the demand for personalized education.
Given this scenario, it is essential to address the tax implications for tutors. Is the income earned from private tuition taxable in India? If so, under which head should it be classified for tax purposes, and which Income Tax Return (ITR) form should tutors use to report their earnings? Understanding these aspects is crucial for tutors to ensure compliance with tax laws and to manage their finances effectively.
What is an ITR?
An Income Tax Return (ITR) is a form that individuals and entities use to report their income, expenses, deductions, and taxes paid to the government. It is a crucial document for ensuring that taxpayers fulfill their legal duty to report their financial activities for a financial year from April 1st to March 31st.
Taxability of Tution income
Tuition income earned on full time basis as primary source of income, whether through private home tuitions, online tutoring, or coaching centers, is classified as “Income from business or profession” as per income tax act. Tutor can claim expenses and arrive at a taxable income.
Individuals who offer tutoring services on a part-time basis, in addition to their primary job, must report their tutoring income as “Income from other sources”.
Expenses Related to Tuition Services
Educational Materials: Tutors can deduct the cost of books, educational software, and other teaching aids required for their lessons.
Supplies and Equipment: This includes stationery, whiteboards, projectors, and other tools necessary for conducting classes.
Internet and Communication Costs: Since many tutors conduct sessions online, expenses related to internet usage, phone bills, and other communication tools can be deducted.
Travel Expenses: For tutors who travel to students’ homes or coaching centers, travel expenses such as fuel, public transport fares, or even the depreciation of a vehicle used primarily for tuition purposes can be claimed.
Workspace Costs: Tutors who operate from a home office can deduct a portion of their rent, property taxes, and utility bills proportionate to the space used exclusively for tutoring.
Maintenance and Repairs: Any maintenance, repairs, or improvements made to the home office space can also be deducted.
Depreciation: If a specific area of the home is used regularly and exclusively for tutoring, depreciation of that portion of the home may be claimed as a deduction.
Courses and Certifications: Fees for courses, workshops, and certifications that enhance the tutor’s skills and knowledge are deductible.
Professional Memberships: Subscriptions to educational journals, professional memberships, and online resources relevant to tutoring can also be claimed.
Is teaching under 44AD or 44ADA?
Section 44ADA applies exclusively to professions listed under Section 44AA(1) of the Income Tax Act. Since teaching is not among the specified professions under Section 44AA, Section 44ADA is not applicable in this case. However, if the income is not categorized as salary, it can be treated as business income, allowing the taxpayer to claim the benefits of Section 44AD.
Is Coaching classes a profession or business?
Since computer job work and income from coaching are not categorized as specified professions under Section 44AA(1) of the Income Tax Act, they do not qualify for the provisions of Section 44ADA. Instead, such income is classified as business income under the Act.
Under Section 44AD, taxpayers can opt for the presumptive taxation scheme, which simplifies income reporting for small businesses. According to this provision:
- You are required to declare a minimum of 8% of your total turnover or gross receipts as your income.
- This applies to eligible businesses with a turnover of up to ₹2 crores.
For your tuition income, classified under Coaching Centres and Tuitions (Code: 17006), ensure accurate calculation of gross receipts to comply with this requirement. By adopting the presumptive taxation scheme, you can simplify your tax filings and reduce compliance burden.
Which ITR form is applicable for tution income?
ITR-1 (Sahaj)
- Eligibility: This form is for individuals with income from salary/pension, one house property, other sources (like interest income,tution income which is not primary source of income), and total income up to ₹50 lakh.
- Ineligibility: Individuals with business or professional income, including tuition income as main source of income, cannot use this form.
- Eligibility: This form is for individuals who do not have income from business or profession. It covers income from salary/pension, house property, capital gains, and other sources.
- Ineligibility: Tutors earning income from tuition services as their primary source of income cannot use this form.
- Eligibility: This form is for individuals having income from a business or profession. Tutors who are self-employed or run their tutoring services as a primary profession should use ITR-3.
- Features: ITR-3 allows the inclusion of income from house property, salary/pension, capital gains, and other sources along with business/professional income.
- Deductions and Exemptions: Tutors can claim all relevant business expenses, depreciation, and other allowable deductions specific to their tutoring services.
ITR-4 (Sugam)
- Eligibility: This form is for individuals who have opted for the presumptive taxation scheme under Sections 44AD. Tutors with gross receipts up to ₹2 crore can opt for this form.
- Presumptive Taxation Scheme: Under Section 44AD, tutors can declare 8% of their gross receipts as income, simplifying the calculation of taxable income.
- Features: ITR-4 simplifies the filing process by reducing the need for detailed bookkeeping and allows for a straightforward calculation of income based on a presumptive rate.
In summary, if tution income is just an additional source of income and not the primary source then ITR 1 or ITR 2 can be used to file ITR after other income sources. If tution income is the primary source of income then ITR 3 or ITR 4 can be used to file ITR. We recommend ITR 4 in most cases due to its simplicity.
Income tax rates for tutors
Old tax Regime
| Income | Tax rates |
| Upto ₹ 2.50 lakh | 0% |
| ₹ 2.50 lakh – ₹ 5 lakh | 5% |
| ₹ 5 lakh – ₹ 10 lakh | 20% |
| Above ₹ 10 lakh | 30% |
You Can claim deduction under Section 80C, 80D, 80G, etc
For senior citizen (age between 60 & 80 years), tax rate is 0% upto ₹ 3 lakhs. Rest of the rates are same.
For super senior citizen (age above 80 years), tax rate is 0% upto ₹ 5 lakhs. Rest of the rates are same.
In Old tax regime, a maximum tax rebate under section 87A of Rs. 12,500 is available for income upto Rs. 5 lakhs meaning your income is totally tax free till Rs. 5 lakhs. The rebate under section 87A is not allowed to a Non-resident.
New tax Regime (FY 23-24)
| Income | Tax rates |
| Upto ₹ 3 lakh | 0% |
| ₹ 3 lakh – ₹ 6 lakh | 5% |
| ₹ 6 lakh – ₹ 9 lakh | 10% |
| ₹ 9 lakh – ₹ 12 lakh | 15% |
| ₹ 12 lakh – ₹ 15 lakh | 20% |
| More than ₹ 15 lakh | 30% |
New tax Regime (FY 24-25)
Income | Tax Rate |
Upto ₹ 3 lakh | 0% |
₹ 3 lakh – ₹ 7 lakh | 5% |
₹ 7 lakh – ₹ 10 lakh | 10% |
₹ 10 lakh – ₹ 12 lakh | 15% |
₹ 12 lakh – ₹ 15 lakh | 20% |
Above ₹ 15 lakh | 30% |
New tax Regime (FY 25-26)
| Income Range (₹) | Tax Rate |
|---|---|
| Upto ₹ 4 lakh | Nil |
| ₹ 4 lakh – ₹ 8 lakh | 5% |
| ₹ 8 lakh – ₹ 12 lakh | 10% |
| ₹ 12 lakh – ₹ 16 lakh | 15% |
| ₹ 20 lakh – ₹ 20 lakh | 20% |
| ₹ 20 lakh – ₹ 24 lakh | 25% |
| Above ₹ 24 lakh | 30% |
Is filing ITR for Tution income required?
No, ITR filing is not required if your income from all sources including tution income is below the basic exemption limit of Rs. 2,50,000 under Old regime or Rs. 3,00,000 under new regime.
But even though it is not compulsory, it is highly recommended as it helps in building financial history, serves as income proof for applying for loan, credit card, Visa.
Step-by-Step Guide for filing ITR for Tution income
1. Registering on the Income Tax E-Filing Portal
- Visit the Portal: Go to the official Income Tax Department e-filing website
- New User Registration: If you are a first-time user, click on ‘Register Yourself’. Choose the ‘Individual’ category and enter your PAN, which will serve as your User ID.
- Fill in Details: Provide your basic details, contact information, and create a password.
2. Choosing the Correct ITR Form (ITR-1 or ITR-2 or ITR-3 or ITR-4)
3. Filling Out Personal Details and Income Information
- Select the Assessment Year: Choose the appropriate assessment year for which you are filing the return.
- Income Details: Enter your income details under the appropriate heads:
4. Claiming Deductions and Exemptions
- Deductions under Section 80C: Enter eligible deductions such as life insurance premiums, PPF, NSC, and tuition fees.
- Deductions under Section 80D: Include premiums paid for health insurance.
- Other Deductions: Claim deductions under other sections like 80E for education loan interest, 80G for donations, etc.
5. Verifying and Submitting the Return
- Calculate Tax: Click on ‘Compute Tax’ to see the tax liability or refund.
- Tax Payment: If there is any tax payable, pay it through the e-filing portal using net banking or other available options.
- Preview and Submit: Preview the completed ITR form, ensure all details are correct, and click ‘Submit’.
- Verification: After submission, verify your ITR within 30 days of filing. You can e-verify using methods such as Aadhaar OTP, net banking, or through a digital signature. Alternatively, you can send a physical signed copy of ITR-V to the Centralized Processing Center (CPC).
What is the Due date of filing ITR for tution income?
The Due date to file Income tax return is 31st July.
In case you have missed this deadline then you can file belated ITR till 31st December with late fees.
Also for any mistake made while filing ITR before 31st July, you can make corrections by filing Revised ITR any number of times till 31st December.
If you miss deadline of Belated income tax return filing then you can file Updated ITR till 2 years from the end of relevant assessment year with late fees and additional taxes.
What are the Consequences of non-payment of Tax and non-filing of ITR?
Failing to pay taxes and file your Income Tax Return (ITR) has severe consequences. Firstly, unreported income is deemed illegal, equating to tax evasion, and can result in a penalty of 100% to 300% of the evaded tax under Section 271(C). Secondly, a penalty ranging from 10% to 90% of the undisclosed amount may be imposed under Section 271AAB, depending on the circumstances. Lastly, if you miss the filing deadline, a 1% interest per month or part thereof will be charged on the unpaid tax amount as per Section 234A.
Conclusion
Before filing ITR for tution income one must be able to classify the income into primary and secondary source of income and then select the correct ITR. Even if your tution income is not taxable, filing of ITR helps in applying for loan, credit card, VISA in future.
In case you still have any query or want to file ITR with CA assisstance then you can contact us at +91 9769647582
FAQ
- Is income from private tuition taxable?Yes, private tution income is taxable under “income from other sources” if it is not the main income source. If it is the main income source then it is taxable under “income from business and profession”
- Is it mandatory for a tutor to maintain books of accounts?No books of account are required to be maintained if your income does not exceed Rs 2,50,000 or your total receipts are not more than 25,00,000 in 3 past years.
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