Children Education Allowance Exemption & Rules | H&R Block
Missed deadline? You can still file your Income tax return
November 13, 2014
Can We Claim Tax Benefits on HRA & Home Loan Together?
November 20, 2014

Children Education Allowance Exemption & Rules

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

  1. Amount spent by the employer for providing free education facility & training of employee is not taxable.
  2. Fixed education allowance received from the employer is exempted from tax to the extent of Rs. 100 per month for a 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 the education of employee’s family member is taxable as perquisite.
  6.  Education facility provided by the institution owned and maintained 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 up to Rs. 1000 per month – per child is exempt from tax.
      2. If the value exceeds Rs. 1000 per month – per child then chargeable tax amount will be calculated as follows:
        • Cost to employer minus 1,000 and minus any amount paid/received from the employee.
    2. Education facility provided to family members other than children will be taxable on the basis of the cost of education in the same institution or in an institution in the nearby locality. If any amount is paid by the employee, then this amount is deducted from the cost of education in the same institution or in an institution in the 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.
H&R Block India
H&R Block India
H&R Block India is the subsidiary of the world's leading tax filing company, H&R Block, US. In India we provide online and personalised tax filing services for individuals, professionals and businesses. We also provide managed services for GST.

11 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

  8. lalit kumar says:

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

  9. Nk sharma says:

    Sir, my wife is a teacher in a private school and my children study in same school. We do not pay any fee to school for children. But School reflects tuition fees in the form of perks to her salary. Can we get a receipt of tuition fees from school for claiming children education allowance.

Leave a Reply

Your email address will not be published. Required fields are marked *