Under Section 10(14), of the Indian Income Tax Act, 1961 a certain amount is tax exempted for the purpose their children's education. 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 Rs. 300 is exempted per child, for up to 2 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). However, in 2008, there are have been further allowances added especially for individuals working in the public sector. These individuals are eligible of certain reimbursements based on their children’s fees etc.
Types of Fees Reimbursable:
According to OM No.12011/03/2008-Estt (AL) dated 2.9.2008, a child’s, tuition fee, admission fee, laboratory fee, special fee charged for electronics, music, agriculture, or any other subject, practical work, fee paid for the use of any aid or appliances by the child, library fee, games/sports fee and fee for extra-curricular activities are reimbursable however subject to the condition that the charges mentioned are levied by the school directly from the student. Besides, reimbursement for purchase of one set of textbooks as well as notebooks, two sets of uniforms prescribed by the school in which the child is studying, one pair of shoes, in an academic year are reimbursable as well. Uniform include all items of clothing prescribed for a day, as uniform by the school, irrespective of colours/winter/summer/PT uniforms.
Eligibility Requirements of The Children:
No minimum age prescribed for reimbursement of CEA is considered with respect of children admitted in nursery classes. But, for physically challenged or specially abled children the minimum age of 5 (five) years is prescribed for disabled children undergoing non- formal or vocational education. However, from 21st February, 2012, the minimum age stipulated as 5 years for disabled children stands removed. Hence, there is no minimum age of child for whom reimbursement is claimed irrespective of the fact whether the child is disabled or not.
The maximum age is 20 years for a normal child but for physically challenged or specially abled children the maximum age is upto 22 years. This information is based on O.M. No.12011/07(ii)/2011-Estt.(AL) dated 21.02.2012 refers.
Eligibility of the School or Institution:
“The school institution has to be recognized by the Central or State Government or UT administration or by University or a recognized educational authority having jurisdiction over the area where the institution is situated. This also applies in respect of children studying in two classes prior to Class-I. i.e.. nursery /LKG / UKG, etc., OM No.12011/03/2008-Estt.(AL) dated 23.11.2009” as per information released by the Government.
Children Education Allowance for Government Employees:
The CEA is payable to individuals of all “Central Government employees including citizens of Nepal and Bhutan, who are employees of Government of India, and whose children are studying abroad” for their children. However, there is a requirement of a certificate from the Indian Mission abroad that the school is recognized by the educational authority who has jurisdiction over the area where the institution is situated.