Education

All You Need to Know About Tax Benefits on Children Education Allowance

The Government of India has been promoting education for a very long time. To ensure that every child is literate and educated, the income tax department of India came up with a number of enticing tax benefits that will promote children education in India. It will eventually lead to a reduction in the payable tax. The government of India provides income tax exemptions and allows tax breaks on the tuition fees paid by you for your child. You can also look for a children education plan for your kid that will help you. It is also known as Children Education Allowance.

After the health of your child, your primary concern as a parent is your child’s education. Giving good quality education, sending the kid to the best school is every parent’s dream. To fulfil that dream, the government of India has decided to help you. Since education costs and inflation rates are the highest, it is impossible to rely on just the savings money you put in your savings account every time you get paid. That is why you need help to save as much money as possible to ensure a better future for your children.

Exemption for your children’s tuition and hostel fees

The government of India will offer you a tax exemption of Rupees 100 every month per child on your child’s tuition fees. A maximum of 2 children can take advantage of this government plan for education purposes in a nuclear family. It is popularly called Children Education Allowance.

The government of India will offer you a tax exemption of Rupees 300 every month per child on your child’s hostel fees. A maximum of 2 children can take advantage of this government plan for education purposes in a nuclear family. It is popularly called Hostel Expenditure Allowance.

Claim the money deducted that was made towards your child’s tuition fees under section 80C

You, as a parent, can claim the deduction that you paid towards your child’s education, like tuition fees. It can be for their school, university, college or any other educational institution. Keep in mind that you can only claim the tuition and the hostel fees under section 80C. Additional fees like transportation fees and development fees are not eligible under this section (80C). You can claim a maximum amount of rupees 1.5Lakh on deductions made towards your child’s tuition fees with respect to provident fund, pension, insurance, etc., in a financial year.

Eligibility criteria to claim the tax benefits

Any guardian or the parent paying the sum/fees towards their children’s education can claim the tax deductions under section 80C.

Each parent is eligible to claim tax deductions for two children. This means the tax deductions for four children can be claimed by a pair of parents, two by each parent.

Each parent can easily claim up to Rs.1,50,000 separately every financial year. It cannot exceed the amount 1,50,000 Rupees under section 80C, 80CCC and 80CCD.

These are the few things that you need to know about tax benefits on Children Education Allowance.

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