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Thread: Income tax exemption on children education allowance

  1. #1
    Junior Member ravipgadi is on a distinguished road
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    Question Income tax exemption on children education allowance

    Dear Sir,
    kindly clarify how much income tax exemption is admissible if a employee claims CEA for last two years in the current financial year - Rs 1200 or Rs 2400 for one child
    Thanks

  2. #2
    Senior Member Victor is on a distinguished road
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    Quote Originally Posted by ravipgadi View Post
    Dear Sir,
    kindly clarify how much income tax exemption is admissible if a employee claims CEA for last two years in the current financial year - Rs 1200 or Rs 2400 for one child
    Thanks
    Para 5.4 (A)(13) of Income Tax Circular dated 16.8.2011 indicates the details w.r.t. "Tuition Fee" which can be claimed for deduction under Section 80C. The same is reproduced below:

    "A. As per section 80C, an employee will be entitled to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,00,000/-:

    13. Tuition fees, whether at the time of admission or thereafter, paid to 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.

    Full-time education includes any educational course offered by any university, college, school or other educational institution to a student who is enrolled full-time for the said course. It is also clarified that full-time education includes play-school activities, pre-nursery and nursery classes.

    It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature."


    Victor
    Last edited by Victor; 23-02-2012 at 10:43 PM.

  3. #3
    Senior Member RKPATHAK is an unknown quantity at this point
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    Rebate on income tax qualifies under Section 80-c where overall limit is Rs 1 lakh

  4. #4
    Senior Member SASI is on a distinguished road
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    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 month per child for a maximum of two children is exempt from Income Tax. Hence 1200 only claim in this year. However since a part of the allowance relates to previous year you can claim relief under Section 89(1).

    sasi

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