Income tax exemption on children education allowance
Children Education Allowance (CEA) under section 10
(14) read with Rule 2Bb(2)(5) of the Income Tax Act is Rs.I00 per month
per child.
This limit as fixed more than 2 decades back when the
maximum amount of Children Education AIlowance for Central Government
Employees was fixed at Rs. 100/- per month per child under the IVth
Central Pay Commission. Now the current rate of this allowance is
Rs.1000 per child.
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.”
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).
Source: CGEN.in
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