The children's education and hostel allowance calculator is a tool that helps you determine the amount of tax-free allowance, which will help in planning the salary structure and reducing tax liability.
To calculate the eligible allowance for Children's Education and Hostel expenditure, you need the following:
This can be understood with the below-mentioned example of Mr. A.
Example: Mr A received Rs. 15,000 children's education allowance & Rs. 10,000 hostel accommodation allowance. He has two kids, for which he pays Rs.1000 per child towards hostel fees and Rs. 500 per child as education fees. Please calculate taxable allowance in the hands of Mr. A.
| Persons Covered | Children Education Allowance | Hostel Allowance |
|---|---|---|
| Amount received | 15000 | 10000 |
| Less: Exemption* | 2400 | 7200 |
| Taxable Allowance | 12600 | 2800 |
*(As amount actually paid > maximum allowed, so the maximum allowed as per act will be exempt)
Planning of CTC plays an important role in optimizing tax liability, with the help of this calculator you came to know about what amount of allowance will be eligible for tax exemption which can help you in tax savings.
Children's Education and Hostel Allowance can be claimed only by individuals who have their children in a hostel or are studying. It is allowed up to a specified amount for a maximum of two children
Payment receipts will be required for claiming Children's Education and Hostel Allowance deduction; however, in case of consolidated combined payment, an annexure or certificate from the educational institution will be provided having bifurcation of amount into various heads for which the payment has been made.
Under the children's education allowance, a maximum of Rs. 100/- per month per child up to two children will be allowed. This amounts to Rs. 2,400/- for the whole year for two children.
Under children's Hostel Allowance, a maximum of Rs. 300/- per month per child of up to two children will be allowed. This amounts to Rs. 7,200/- for the whole year for two children.
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