Children Education Allowance Exemption & Rules | H&R Block

Children Education Allowance Exemption & Rules

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Children Education Allowance Exemption & Rules

Education facility provided by employer to employee is treated as perquisite. Following are some key considerations from the point of view taxation.

  1. Amount spent by employer for providing free education facility & training of employee is not taxable.
  2. Fixed education allowance received from employer is exempted from tax to the extent of Rs. 100 per month for maximum of 2 children.
  3. Allowances paid for hostel is exempt to the extent of Rs. 300 per month for maximum 2 children.
  4. School fee paid directly by the employer for employee’s family member is fully taxable.
  5. Reimbursement of expenses paid for education of employee’s family member is taxable as perquisite.
  6.  Education facility provided from the institution owned and maintain by the employer to employee and his family members will be taxable under the following conditions:
    1.  Education provided to employees children:
      1. Educational expenses upto Rs. 1000 per month – per child is exempt from tax.
      2. If value exceeds Rs. 1000 per month – per child then chargeable tax amount will be calculated as follows:
      3. A.
        Cost of such education in similar Institution or
        Institution in nearby locality
        Rs. XXXX
        B.Less: Exempt amount per childRs. 1,000
        C.Less: Amount paid by or recovered from employeeRs. XXXX
        D.Taxable AmountD= A-(B+C)
    2. Education facility provided to family members other than children will be taxable on the basis of cost of education in same institution or in institution in nearby locality. If any amount is paid by the employee, then this amount is     deducted from the cost of education in same institution or in institution in nearby locality, the difference amount is taxable.
  7. Scholarships are tax free when the amount paid is received in a bank account maintained specifically for the purpose of a scholarship scheme. Scholarships paid by the employer are not taxable as perquisite.
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9 Comments

  1. mahesh says:

    children education allowance exmptions, even if children are born as twin or more, what is rule about it, pls clarify whether only rs 100 per child max of two childern is exempt

    • Ritesh Kumar Singh says:

      yes Rs.100 per child and maximum 2 child for Tuition fee (2400). And for hostel charges Rs.300 for two children is exempt.

  2. Vikas tyagi says:

    I claimed rs 18000 as CEA . tell me about income TeX rebate . I am serving in SSB MHA

  3. louie says:

    Is Day care after school considered as Hostel?

  4. Bilal Ahmed says:

    Can we claim for second and third child’s education allowance instead of first and second child?

  5. Kirti Kumar says:

    Can we not claim for Annual or Quarterly Tuition fees paid in one go? Because, most of CBSE and ICSE schools in India charge more than INR 2400 per month or quarterly basis.

  6. D. Galalbhai says:

    I claimed rs36000 as CEA tell me about income TeX rebate Am serving BSF

  7. D.VENKATESWARAN says:

    I CLAIMED RS 54000 AS CHILDREN INCOME TAX EXEMPTION FOR STUDYING IN INDIA OR ABROAD PLEASE CLARIFY WHETHER ITS APPLICABLE FOR INCOME EXEMPTION 2016-2017

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