Manager - Finance & Accounts
58312 Points
Joined June 2010
Hi Kuldeep,
Regarding Children Education Allowance (CEA) for Indian Army personnel:
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As per Section 10(14)(ii) of the Income Tax Act, the exemption for Children Education Allowance is ₹100 per month per child for a maximum of 2 children.
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This means the total exemption allowed is ₹2,400 per annum (₹100 × 12 months × 2 children).
Your case:
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CEA received: ₹27k per annum per child
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Exemption allowed: ₹2,400 per annum (for 2 children, max)
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The balance amount (₹27k - ₹2,400 = ₹24.6k) is taxable and should be included in income under the head "Salaries."
If the allowance exceeds ₹100 per month per child, the excess is taxable.