Moment guide · FY 2026-27
I am claiming children's education allowance and tuition fees
What is exempt under children's education allowance?
The children's education allowance under section 10(14)(ii) exempts ₹100 per child per month for up to two children, plus ₹300 per child per month if the child stays in a hostel. Tuition fees for up to two children are deductible under 80C within the ₹1.5L ceiling in the old regime, and scholarships received by the child are exempt under section 10(16).
Your legitimate options
Every route the statute actually gives you — with its condition, cap and deadline.
| Route | Condition | Cap / deadline |
|---|---|---|
| Education allowance u/s 10(14)(ii) | ₹100 per child per month, for up to two children, exempt | ₹2,400 a year max (2 children × ₹100 × 12) |
| Hostel allowance | ₹300 per child per month for children in a hostel, up to two children | ₹7,200 a year max |
| 80C tuition fees | Tuition fees for up to two children deductible under 80C within the ₹1.5L ceiling (old regime) | Old regime only; ₹1.5L 80C cap shared with other investments |
The #1 trap
Claiming the full ₹100 per child without capping at two children, or confusing the allowance with tuition fees. Also, a scholarship received by your child is exempt in the child's hands under section 10(16) — it does not become your income — while tuition fees you pay are an 80C item in the old regime, not an allowance exemption.
The decision path
Follow it top to bottom — the first condition that matches is your answer.
Worked example
Nikhil, father of two school-going children in Mumbai
Nikhil's employer pays him a children's education allowance of ₹3,600 a year. Under section 10(14)(ii), the exempt amount is ₹100 per child per month for up to two children, which is ₹100 multiplied by 2 children multiplied by 12 months, equal to ₹2,400 a year. His elder daughter is in a hostel, so he also receives a hostel allowance of ₹7,200 a year, and the exempt portion for the hostel allowance is ₹300 per child per month, which is ₹3,600 for the one child in the hostel, leaving the balance taxable. He pays annual tuition fees of ₹90,000 for his two children, and under section 80C he can deduct the fees up to the ₹1.5L ceiling, alongside his EPF contribution of ₹72,000 and his PPF of ₹50,000. The combined 80C stack is ₹2,12,000, so the ceiling of ₹1.5L binds, and he prioritises the tuition fees and EPF within it. His daughter also won a merit scholarship of ₹40,000 from a university trust, and that scholarship is exempt under section 10(16) in her own hands — Nikhil does not add it to his income. If Nikhil were in the new regime, the 80C deduction for tuition fees would disappear, although the section 10(14)(ii) education allowance exemption continues to apply. He reports the taxable part of the education and hostel allowances as shown in his Form 16 Part B and keeps the fee receipts for the 80C claim. The family's total 80C utilisation is capped at ₹1.5L, so he never overclaims the tuition fees. A quick call with us dials in the final figure. Nikhil also checks his Form 16 Part B, where the employer shows the taxable portion of the education and hostel allowances; if the employer omitted the exemption, he claims it in the return by adjusting the allowance. The exemption is limited to two children, so a third child's allowance is fully taxable, and he keeps the school records showing which children the allowance covers. The 80C claim for tuition fees is restricted to fees actually paid for full-time education, so donations to the school's building fund or transport fees do not qualify. A quick call with us dials in the final figure.
Questions people actually ask
Sections: 10(14)(ii), 80C, 10(16) · Last verified 2026-08-11 · Reviewed by Harun Raaj & Associates, Chartered Accountants. Every figure cites the Income-tax Act, 1961 (with ITA 2025 mapping via our section index).