Children Education Allowance Exemption

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It is better to plan your income tax liability in advance. If you are in employment you can plan your income for maximum tax benefits. One of the main expenditure that you can claim as an exemption is the tuition fee you pay for your children. You can take double benefit for your child’s education. First, under section 10, you can structure your salary by including child education allowance. Again under section 80C, you can claim tuition fee paid for your children. Here I am giving all the rules and details about Children Education Allowance Exemption. Check this below.

Children Education Allowance under section 10 of the Income Tax Act is Rs. 100 per month per child. This limit as fixed more than 2 decades back when the maximum amount of children Education Allowance for Central Government Employees was fixed at Rs. 100 per month per child under the fourth Central Pay Commission. Now the current rate of this allowance is Rs. 1000 per child.

Fixed children education allowance that is received from the govt. employer has now exempted from the tax to the amount of INR 100 per month for maximum 2 children.

children's education

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Children Education Allowance Exemption:

Plan your salary structure to lower your tax liability. Normally you have your salary structure in the popular brackets such as Basic Salary, DA, Conveyance, HRA etc. One of the less popular but allowed exemption is education and hostel allowance for your child. Education allowance up to 2 children is allowed.

The limit under section 10 for child education allowance is Rs. 100 per child per month. So if you have 2 children you can claim exemption of Rs. 2400 per year. Further, if your child is staying in a hostel, you can claim the Hostel allowance up to Rs. 300 per month per child. Again you can claim exemption of Rs. 7,200 per year. Note that child education allowance is allowed if you have actually incurred this expenditure.

The Children education allowances funded for the hostel has now exempted to the extent of INR 300 per month for the maximum of 2 children.

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child's education

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Children Education Allowance Exemption Under Section 80C:

You can claim an exemption under section 80C for tuition fee incurred on educating your child. The exemption is allowed up to 2 children.

However, in the case of the second child is a twin then you can also avail children education allowance exemption for the third child.

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How Many Children Education Allowance Exemption Is Allowed?

The exemption is allowed up to Rs. 1,50,000 for a year for the current assessment year. Education allowance with other exemption should not cross the maximum limit allowed under section 80c.

The exemption is allowed up to 2 children. If you have 3 children, you can claim the exemption only for 2 children. The Children Education Allowance Exemption is allowed if you have actually paid the fees. Further, you can not claim an exemption for any other amount paid to a school other than tuition fee. Other expenses such as van fee, library fee, donations etc. are not allowed. You can claim expenses incurred on nursery or pre-nursery classes too. Private tuition fees are not allowed as an exemption.

Full-time education includes any educational course offered by any university, college, school or other educational institution situated in India, for the purpose of full-time education of any two children of the employee.

Apart from section 80c, Children’s education allowance up to Rs. 100 per month per child for a maximum of two children and hostel expenditure allowance of Rs. 300 per child for a maximum of two children is exempt from income tax. Hence maximum INR 1200/- only can be claimed in this year. However, since a part of the allowance relates to previous year you can claim relief under section 89(1).

The exemption is allowed up to Rs. 1,50,000 for a year for the current assessment year.

faq of children education allowance exemption

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FAQ Regarding The Children Education Allowance Exemption:

Check out the FAQ regarding the children education allowance exemption below.

Q. What is the Children Education Allowance Exemption?

A. If you’re receiving education allowance for your children from the employer then you’re qualified to claim the tax exemption under Income Tax Act 80c.

However, the extreme amount of exemption is INR 1200 per annum or INR 100 per month for up to 2 children of a family. In addition, an employee can as well claim the deductions for children’s paid education fees under section 80C.

Q. What is the Hostel Expenditure Allowance Exemption?

A. Just like the children education allowance exemption, if you are also receiving hostel expenditure allowance from the employer then you are qualified for the exemption up to INR 3600 per annum or INR 300 per month for up to 2 children.

Q. How many children education allowance exemption is allowed?

A. Under section 80c monthly maximum children education allowance exemption is INR 100 only for 2 children.

Q. Is Tuition Fees can be added to the children education allowance exemption?

A. YES… Only the tuition fee is allowed for the deduction. However, other fees such as transport fees and development fees are not entitled to the deduction under Section 80C.

Q. What Is The Maximum Amount of Exemption Allowed?

A. The maximum exemption is allowed up to INR 1,50,000 for a year for the current assessment year.

Q. Who is eligible for the children education allowance exemption?

A. An employee who is paying any amount for their children education allowance is eligible for the tax deduction or exemption.

Q. How many Children can be covered under the children education allowance?

A. The exemption is obtainable to a maximum of two (2) children for an individual. Consequently, a maximum of four (4) children’s exemption can be demanded i.e. two (2) children by each parent.

Q. What are the fees that are reimbursable?

A. Admission fee, tuition fee, laboratory fee, special fees for subjects such as electronics, agriculture, music, etc. are paid under the children education allowance exemption.

Q. Are the Annual Charges, Development Fees, transportation Fees reimbursable?

A. YES, the fees for the practical work, the fees for use of any appliances or aid by your child, sports/games fee, library fee and fees for your kid’s extra-curricular activities are reimbursable.

Q. Is Reimbursement towards the purchase of uniform, school bag, shoes, stationery, and water bottle admissible?

A. Reimbursement for the purchase of

  • 1 set of notebooks and textbooks
  • 2 sets of uniforms if suggested by the school where your child is studying
  • 1 pair of shoes in an academic year are reimbursable

 

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