Children Education Allowance & Tuition fees

Children Education Allowance Exemption

Hello, in this post we will discuss the Children Education Allowance – eligibility, and tax benefits, in which we will look into the following in detail:

Children Education Allowance

To meet the education expenditure of children, the Government of India offers a tax exemption known as Children Education Allowance. This permits Rs. 100 exemption per child for up to two children in a nuclear family. Further, if the child goes to a boarding school, a further exemption of Rs. 300 is exempted per child, for up to two children. This provision is also included in the same section of the Income Tax Act and is called the Hostel Expenditure Allowance, whereas the prior one is known as the Children Education Allowance (CEA). Children Education Allowance is exempt under Section 10(14) of Income Tax Act.
To claim the tax benefit, Individuals need to fill Form 12BB and submit to their employer in case the income is inherited from a form of salary. For others, a rebate has to be claimed by filling the form under the VI-A schedule under 80C of Indian income tax. This provision was brought in by the government to increase the literacy rate.
One has to note that for many salaried individuals, the children education fee which includes tuition and hostel fees along with allowances for the purchase of textbooks form a component of their salary. The exemption can be claimed on the fee paid for the child’s education purpose and is directly levied by the school. This shall also include the fee paid towards child uniform set, a maximum of two sets.

Eligibility Requirements of The Children

There’s no particular age given for reimbursement for Children education allowance for a nursery going child or for a specially-abled child, to undergo vocational or non-formal education.
For a normal child, the maximum age is 20 years and in case of a specially-abled child, the maximum age is up to 22 years.

Children education allowance rules

All individuals including the Government of India employees who are the national citizens of Nepal & Bhutan and the employees whose children are studying outside of India are entitled to Children education allowance. In which case they have to submit a certificate from that particular country’s Indian mission office that the child’s school is recognised by the education board of that particular jurisdiction where the school is located.

Exemption for education and hostel charges

All types of fees incurred for the child’s educational purpose are reimbursable under one single condition that the fee is incurred by the school for that particular child. Even the expense incurred for the uniform of the child in that particular academic year is reimbursable. The set of uniforms includes all pieces of clothing as prescribed by the school as part of school uniforms including summer/winter/weekly uniforms.

How to Claim the tax benefit on Tuition Fee paid for Children?

First, all the bills incurred as the expense of the student in that particular academic year have to be submitted to the employer.
Second, proof of tuition fees paid for the academic year has to be shown as well. Third, anybody other than a salaried person can claim the deduction under VI-A by showing proof of the tuition fee paid for the year under clause 80C of income tax while filing the returns.

The point to be noted here is that clause Section 10(14) for educational fee allowance and Section 80C for a tax deduction for tuition fees are two separate provisions and hence can be claimed separately as per the Income Tax Act, 1961.

We have come to the end of this post about Children Education Allowance – eligibility, and tax benefits. If you have any questions, drop them in the comment section below.