Children fee reimbursement

This query is : Resolved

neerja (Querist)
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01 August 2013 thanks for your reply. but still not satisfied. the letter no which you have mentioned is from which department?
the children fee reimbursement is not an allowance included in the salary, so rs 100/- deduction on this is not possible. the amount of rs 1250/= reimbursement is given in 6th pay commission, so how letter dated 1965 can be applicable for year 2006? this reimbursement is given after the expenditure. so how it can be perquisite. moreover for every perquisite some minimum amount is tax exempted, so is rs 1250 not that minimum amount?
as per perquisite details on net, link provided by you is as:
3.10 Value of benefit resulting from the provision of
free or concessional educational facilities
The value of the benefit to the employee resulting from the
provision of free or concessional educational facilities for any member
of his household is the sum equal to the amount of expenditure
incurred by the employer in that behalf. In the case where the
educational institution is itself maintained or owned by the employer,
or where free educational facilities for such member of employees’
household are allowed in any other educational institution by reason
of his being in employment of that employer, the value of the
perquisite is determined with reference to the cost of such education
in a similar institution in or near the locality (however, in this case
this sub-rule does not apply if the cost of such education or the
value of such benefit per child does not exceed Rs. 1,000 per month).
Where any amount is paid or recovered from the employee on that
account, the value of benefit is reduced by the amount so paid or
recovered.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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02 August 2013 Hi

1. Income tax act is introduced in the year of 1961, So yearly what ever changes is coming we need to update and if where ever changes are not there, old provision only will apply. so there is no matter of question the letter is old dated

2.Whatever you have mentioned above, apply for educational facility provided by employer or provided by institute run by employer or other institution due to employment,so not covered the reimbursement

Let me explain what is facility provided and what is reimbursement

Facility provided- employer running institute and not charging anything from employer or partly charging or due to facility provided for reason of employment

Reimbursement - employee paying the fees to school and later and submit to employer for reimbursement , or employer directly making payment to institute against fees.

Since the reimbursement is clearly mentioned as taxable. so your school fees reimbursement is taxable only

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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01 September 2013 Previously there was provision for allowing deduction on the basis of 2 children for educational allowance received which has been amended and now Section *) C is applicable and there you can claim the fee paid for your 2 children and that is within the limit of Section 80C.

In the present scenario the payment made by the employer for the benefit of your children is to be treated as a perquisite if the school is not owned by your employer otherwise it is exempted.

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