do not add education fees in income provided by employer to their employees

Why Should Education Fees Not Be Added to Taxable Income? Here’s why the suggestion to exclude employer-paid education fees from taxable income makes sense: 1. Encouraging Employee Welfare: Financial Relief for Employees: Exempting education benefits from taxable income would be a major relief for employees, especially those with school-going children. It would allow families to save more and invest in other important areas like healthcare, savings, or homeownership. Promoting Education Access: Many employers offer educational allowances or reimbursement to help employees afford the cost of education for their children. By removing the tax burden on such allowances, employees would be more encouraged to take advantage of such benefits, leading to improved access to quality education. 2. Aligning with Global Practices: In several developed countries, employee benefits related to family welfare (including education) are not taxed, or are taxed at a reduced rate. This is seen as a way to promote work-life balance and improve the overall well-being of employees. Aligning with such global practices could also make India more attractive to skilled workers and multinational companies. 3. Fairness in Taxation: If an employer provides education assistance as part of an employee's compensation, it should be viewed as a benefit in kind, similar to other non-cash benefits like medical reimbursements or transportation allowances. These types of benefits are typically not taxed in many countries, and not taxing education assistance would be a step towards creating a fairer tax system. 4. Tax Structure Simplification: The current complexity around education-related perquisites is an example of the broader issue of the need for tax reforms in India. Simplifying the tax structure by excluding educational benefits would reduce administrative burdens for both employees and tax authorities. 5. Supporting Middle-Class Families: Education costs are often a significant portion of a family’s budget. If the cost of education is provided by the employer as part of compensation, it should ideally be tax-free. This would ease the financial burden on employees, particularly in a country like India, where education expenses are rising, and where there is a large middle-class population who could greatly benefit from such relief. Possible Changes to the Tax Structure: Given the complexity and challenges with the current system, here are some possible changes to the tax structure that could benefit employees: 1. Exempt Employer-Paid Education Fees from Taxable Income: As suggested, education fees paid by the employer should not be added to the taxable income of the employee. This would provide significant financial relief, especially for middle-class families with children in school or college. 2. Expand and Simplify the Tax Exemptions for Education Benefits: The current exemptions should be expanded to cover a broader range of educational benefits, including: Tuition fees for children in any recognized school or college (not just those operated by the employer). Scholarships, grants, or allowances provided by the employer for further studies. Education-related expenses like books, supplies, or extracurricular activities. 3. Clarify Tax Treatment of Educational Allowances: The Income Tax Act should clearly define the tax treatment of various types of educational allowances or reimbursements provided by the employer to avoid confusion. This would help both employers and employees understand their tax obligations. 4. Introduce a Specific Education Tax Credit: Instead of treating employer-provided education allowances as a perquisite, the government could consider introducing an education tax credit for all employees, which would allow them to claim a portion of their educational expenses as tax-deductible. Conclusion: Exempting employer-paid education fees from taxable income is a sensible suggestion that would benefit employees, especially those with children in school or college. It would also make the tax system simpler, fairer, and more aligned with global practices. For India, where education is a significant expense for many families, such a reform could have a positive impact on work-life balance, employee welfare, and the overall economy. more  

Yes, it's important to keep it out of IT as such provision is made to provide to compensate a part of expenses incurred for education. This was earlier exempted under the regime of previous Govt. Unfortunately, these exemptions are withdrawn in this current regime. In addition tax is imposed on essential items of education to make it worse to an individual. more  

Exempting education fees provided by employers from taxable income can benefit employees & promote workforce development. Here's a possible proposal: Tax Structure Change Proposal: Exemption from Taxable Income: - Education fees reimbursed or provided by employers, up to a specified limit (e.g., $5,000/year). - Applies to: - Full-time employees. - Part-time employees (pro-rata basis). - Family members (spouses, children) if covered under employer's education policy. Eligible Education Expenses: - Tuition fees. - Course materials. - Certification programs. - Professional development courses. - Degree programs (undergraduate, graduate). Benefits: 1. Increased Take-Home Pay: Employees benefit from tax-free education assistance. 2. Improved Workforce Development: Employers invest in employees' skills, boosting productivity. 3. Talent Attraction and Retention: Competitive benefit for attracting and retaining top talent. 4. Simplified Administration: Employers no longer need to report education benefits as taxable income. Implementation: 1. Amend Tax Code: Update relevant tax laws and regulations. 2. Define Eligible Expenses: Clarify eligible education expenses and reimbursement limits. 3. Employer Compliance: Ensure employers adhere to exemption guidelines. 4. Employee Awareness: Educate employees on tax-free education benefits. Non-Indian & Foreign to India Global Precedents: 1. United States: Section 127 of the Internal Revenue Code allows tax-free education assistance up to $5,250/year. 2. Canada: Employer-provided education benefits are tax-exempt under certain conditions. 3. UK: Employer-funded education is tax-exempt up to £8,500/year. Potential Challenges: 1. Abuse Prevention: Implement measures to prevent misuse of tax-free education benefits. 2. Equity and Accessibility: Ensure benefits are accessible to all employees, regardless of income level or job position. 3. Revenue Impact: Assess potential revenue impact on government finances. By exempting education fees from taxable income, employers can support employees' growth, and governments can foster a skilled workforce, driving economic growth. But , also to recall is that the late Hon'ble Supreme Court Advocate , His Excellency Sri. Shanti Bhusan tried to convince the Supreme Court on exempting the expenses incurred under one's Brain Surgery and/or Brain Transplant for taxation objectives but to of no avail since the Supreme Court opined that only the Parliament of India could be able to enact on such kind of Brain-mutation-related medical issues for income-tax gamut . more