NEW DELHI: Several tax benefits for skilling have been proposed in the Budget by
National Skill Development Corporation
as the govt seeks to align it with formal
education
.
In its presentation to the finance ministry, the govt agency has proposed extending several benefits – deductions on tuition fees and interest on loans, exemptions for scholarships, lower tax rates for for-profit skilling institutions, exemptions to educational institutions to skilling programmes, ensuring tax exemptions for training institutes and enhanced deductions for skilling expenditures, apart from changes to the Goods and Services Tax (GST) regime.
In the amendments sought under the direct tax laws, it proposed to add an explanation to clarify that ‘education’ includes
skill development
programmes and training conducted by training institutes, which will enable them to be eligible for seeking exemptions applicable to trusts.
“This will enable institutions to function at a lower cost and make the programme more affordable and of better quality as well as enhance access,” said an official of NSDC. The proposal also sought deduction to individuals on donations made to training institutes providing skilling courses.
The skilling body and the skill development ministry have argued that govt has focused on education, providing a slew of incentives and exemptions to educational institutions, which significantly improved India’s literacy ratio.
“These changes aim to align skilling with formal education, providing extensive tax benefits and incentives to skilling institutions, thereby making skilling more accessible and affordable,” a senior official told TOI.
In line with provisions for not-for-profit universities and other educational institutions, it also proposed exemption from
Income tax
. To boost its growth and expand its reach to its target trainees at affordable pricing, it is recommended lower tax rates for new skilling training centres.
Other recommendation includes extending deduction on tuition fees to skill training institutes, encouraging individuals to upskill/ reskill and easing financial burdens, interest on loans for vocational and skill development training will be eligible for
tax deductions
, promoting higher participation in skilling, and interest on loans for vocational and skill development training will be eligible for tax deductions, promoting higher participation in skilling. Tax exemption is also sought for scholarships for skill development courses.
