Introduction: 

Education stands as one of the paramount investments parents make for their children. Nevertheless, the expenses related to school fees and other educational necessities can pose a considerable financial strain on families. To alleviate this burden and foster literacy, the government provides tax deductions on tuition fees paid for children. In this article, we will delve into the tax benefits associated with children’s tuition fees, the eligibility criteria, and the process of claiming them.

Children Education Allowance:

The government extends a cash benefit called the Children Education Allowance (CEA) to its employees, designed to help with the cost of their children’s education The aid aims to ease the financial pressures of school fees and encourage public servants to pursue better education for their children.

The Government of India provides a tax exemption of Rs 100 per child for a maximum of two children within a family, intended for their educational expenses. This benefit, known as Children Education Allowance, is applicable to children under the age of 20. Therefore, families can avail an annual claim benefit of up to Rs 2400 under this allowance. This claim is covered under Section 10 (14) of the Income Tax Act.

Eligibility Criteria : 

• To be eligible to apply for a Children Education Allowance, children must meet specific age and educational level requirements. The eligibility criteria are .
• There is no minimum age requirement for reimbursement of Children Education Allowance for children enrolled in nursery classes.
• The maximum age limit for claiming Children Education Allowance for a typical child is 20 years. This allows government employees to utilize Children Education Allowancefor their child’s education until they reach the age of 20.
• Previously, physically challenged or specially abled children undergoing non-formal or vocational education needed to be a minimum of 5 years old to qualify for CEA. However, effective from 21st February 2012, this minimum age requirement for disabled children has been eliminated. Consequently, there is no longer a minimum age limit for any child, irrespective of their disability status, to seek reimbursement under CEA.
• For physically challenged or specially abled children, the maximum age limit for claiming CEA is extended up to 22 years.

Eligibility Criteria of the School or Institution:

• To qualify under the Children Education Allowance (CEA) scheme, a school or educational institution must meet specific recognition criteria. It should be officially recognized by one of the following authorities:
• Recognition from a university is also considered for eligibility under the CEA program.
• If the school is located within a Union Territory, it must obtain recognition from the administration of that UT.
• If the institution operates within a region governed by a recognized educational authority, it must secure authorization from that entity.
• This recognition requirement encompasses not just regular classes but also extends to children enrolled in classes preceding Class-I, such as nursery, LKG (Lower Kindergarten), UKG (Upper Kindergarten), etc.

Types of Fees Reimbursement : 

• The Children Education Allowance stands as a valuable support provided to employees to aid them in covering  educational costs of their children. Here are the different fees eligible for reimbursement:
• The fee paid during school admission is eligible for reimbursement. This one-time charge is typically levied to reserve a seat for the child in the institution.
• Fees designated for particular subjects or specialized courses, such as electronics, music, agriculture, etc., are reimbursable under the Child Education Allowance scheme.
• Fees imposed for accessing the school library and its resources are eligible for reimbursement under the CEA.
• They are eligible for reimbursement of fees for participation in extracurricular activities, such as arts, crafts, and debating.
• The cost of two sets of uniforms, as prescribed by the school, regardless of colors or types (winter/summer/PT uniforms), is eligible for reimbursement.
• The regular tuition fees charged by  school or educational institution where the child is enrolled are eligible for reimbursement. These fees encompass the cost of classroom instruction and academic learning.
• Fees for laboratory facilities and practical work associated with subjects such as science, computer science, or any other hands-on learning activities are eligible for reimbursement.
• If the child is required to use any aids or devices as part of the educational course, user fees are eligible for reimbursement
• Any fee collected for participating in sports or extracurricular activities at school qualifies for reimbursement.
• Reimbursement is permitted for the purchase of one set of textbooks and notebooks necessary for the child’s academic year.

Deduction on Tuition Fees:

• A parent can claim a deduction on the actual amount paid as tuition fees to university, college, school, or any other educational institution. However, other components of fees such as development fees and transport fees are not eligible for deduction under Section 80C.
• Within a fiscal year, individuals are eligible to claim a maximum deduction of Rs 1.5 lakh. for payments made towards tuition fees, in addition to deductions for items such as insurance, provident fund, pension, and others.

Rules Under the Children Education Allowance:

• Child Education Assistance is  governed by specific laws and regulations intended to provide government employees with financial assistance for the educational costs of their children. Here are the main rules and regulations associated with CEA.
• CEA encompasses two primary areas of expenses for the focused employee:
• Hostel Charges Allowance: The current allowance for hotel charges is Rs. 300 per child, you have a limit of two children per family.
• Education Allowance: In this Education  allowance,  can claim Rs. 100  per child monthly for up to two children. However, applications for a third child will not qualify for reimbursement.
• Section 80c of the Income Tax Act defines tax deductible expenses. From 2020, individuals will be able to claim tax credits on all fees paid as tuition fees to schools, colleges, universities and other educational institutions. However, these educational institutions will be exempted only if they are recognized by appropriate central and state institutions.
• Payments made as development fees do not qualify for tax benefits under CEA.
• Any payment not directly associated with educational purposes, such as fees for non-educational activities or charges unrelated to academic pursuits, is ineligible for tax benefits.
• Adhering to the government’s limitations regarding CEA is crucial. The exemption is granted solely for costs directly associated with education and hostel charges for up to two children. Any amount claimed for more than two children or expenses not meeting t specified criteria will not  eligible for reimbursement or tax benefits.

 Procedure for Claiming Tax Exemptions:

• Individual taxpayers can claim income tax exemption for children’s education under Section 10(14) and a deduction for the  tuition fees under Section 80C.
• Salaried individuals must submit the fee receipts issued by the schools or institutions to their employer by the year’s end during the investment proof submission. Additionally, they must declare it in Form 12BB.
• An individual who is not a salaried employee can only claim the tuition fee deduction under the VI-A schedule in Section 80C. Non-salaried taxpayers are not obligated to submit any bills while filing their Income Tax Returns (ITR). However, they should retain the receipts as evidence to support their claims.
• It is important to clarify that children’s education allowance, a component of the salary structure, and tuition fees are distinct deductions. Therefore, these deductions can be claimed separately within the limits discussed above. 

Conclusion:

The Children Education Allowance (CEA) stands as a vital government benefit acknowledging the pivotal role of education in shaping our nation’s future. Serving as a financial support system for government employees, it empowers them to afford quality education for their children without shouldering undue financial strain.