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November 26, 2022

Salaried having two children both studying in Hostel can save Rs 2880/- of Income Tax

by CA Shivam Jaiswal in Income Tax

Salaried having two children both studying in Hostel can save Rs 2880/- of Income Tax

Salaried having two children both studying in Hostel can save Rs 2880/- of Income Tax

Many employees dont claim and many employers do not offer the allowance.

Imagine an org having 2000 employees can save 28 lakh in Tax assuming 50% claim the benefit

Exemption for Children’s Education and Hostel Expenditure

Children’s Education Allowance : INR 100 per month per child up to a maximum of 2 children.

Hostel Expenditure Allowance : INR 300 per month per child up to a maximum of 2 children.

Two Condition :

1) Receive allowance as part of Salary from Employer

2) Expenses are incurred in India as per Section 10(14) of the income tax act

Claiming full 2400 and 7200 total 9600 Tax saving @ 30% = 2880

Can you guess when the limit of Education allowance / Hostel allowance was last revised?

Is Rs 100/- justified per month. The current education cost is 10k per month and hostel 30k per month

Source

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