It is usual that you pursue some education course while being in employment to help you gain skills that could improve your performance at the workplace. If you are wondering how you can claim a deduction for the self-education expenses in your tax return, then this article can guide you for the same. 

For claiming a deduction for self-education expenses, the primary condition is that self-education should relate to your current work activities in your employment. You can also claim expenses for self-education if you have received a taxable bonded scholarship. To claim a deduction in case of taxable bonded scholarship you must satisfy the study requirements that are laid down to maintain your right to scholarship. 

Only the expenses incurred on eligible courses can be claimed by you. Read further to understand what eligible courses mean. 

Eligible Courses 

Expenses incurred on self-education are eligible for deduction only when the course results in a formal qualification and has a connection with your current work activities as an employee in a way that it fulfills the following two conditions: 

  • Your level of skill or knowledge required in your current work activities is either maintained or improved 
  • The course either leads to or is expected to give rise to an increase in your income level from your current work activities. 

You may also note that you can’t claim a deduction for expenses on a course that enables you to get a new job. 

Which Expenses Can Be Claimed? 

There are following three types of expenses for which you can claim a deduction: 

  • General Course Expenses 
  • Depreciating Assets 
  • Car Expenses 

Some expenses are not allowed to be claimed as a deduction. If you want to get a detailed list of such expenses you can reach out to us at Auditax. 

General Course Expenses 

There are a lot of general expenses that can be claimed in relation to courses taken by you for self-education such as course and tuition fees, fares, stationery, textbooks, phone calls, and so on. Further, if an expense is incurred partly for self-education and partly for other purposes, then you can claim only the proportionate expenses related to self-education. 

Depreciating Assets 

The expenses relating to depreciating assets can be claimed as follows: 

  • Decline in value for the depreciating assets costing more than $300 
  • Full cost of the asset for those depreciating assets that cost $300 or less. 

If you are deploying the asset for personal uses also, you must apportion the expenses. 

Car Expenses 

Car expenses that you incur on self-education can be claimed only for the following two kinds of travel: 

  • From home to education place and back 
  • From work to education place and back 

When is $250 Reduction Done in Expenses? 

For tax deductions, self-education expenses are divided into five categories. If all your expenses fall in “Category A”, then you are required to reduce your expense claim by $250. However, some expenses fall in “Category E” and are allowed to be set off against the $250 limit.