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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30 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

    • HRBlockIndia HRBlockIndia says:

      Income tax law allows only Rs. 1200 p.a. per child to be claimed as tax exemption under CEA. You can claim this amount for maximum 2 children (i.e total Rs. 2400).

  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

  8. lalit kumar says:

    confirm current status of CEA . As i got information now its 15000 per child

  9. Manmohan Singh chaudhary says:

    My one child singel and second or third child twin h tb child education allounce kis ko me legal
    Me railways me hu

  10. Rajesh Kumar says:

    Dear Sir , I have invested Rs 150000/- in PPF account. Can I claim tax exemption for my children education under 80 c. Kindly guide

    • Abhishek Aryan says:

      No your investment claimed limit is reached to maximum of Rs.1,50,000.00 so you can’t claim your children education allowance.

  11. sanjay says:

    My employers does not pay any allowances to me (only Basic and DA) is paid. Can i claim deduction of Travelling allowance (Rs. 1800 pm) and education allowance (Rs. 100 pm ). Please reply as it is urgent

  12. Arvind says:

    Sir as a Indian army person have more allowances under section10(14)ii where we claim in e filling and department of army issue 16 form the write section 10 relief but they not match and my 80C deduction also not match because I ment in civil lic pls explain me

  13. Felix Mesquita says:

    Sir i Have claimed C.E.A. of Rs 11,000/- which includes books, uniform , shoes for two children . I have claimed deduction of 2400/- . Can i show only the Tuition Fee which i paid in the savings which has a limit of 1.50 Lakhs. Thanks

  14. R Shanjar says:

    Regarding CEA whether we need to submit proofs

  15. Yogesh says:

    Can I claim a rebate of Rs 2400/- for 2 children under CEA. I am getting Rs 18000/- as CEA for 2 children. Can I claim another Rs 3600/- as hostel exemption for a year for a child? Thus a total of Rs. 6000/-

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