What is Children's Allowance? How can you save tax on expenses incurred for children? Here's how
The Central Government's CEA allowance provides financial assistance to employees for their children's education. The new rules simplify eligibility, amount, and claim process, and also provide additional relief in certain circumstances.
The central government recently clarified some important points regarding the Children's Education Allowance (CEA), a child education allowance provided to government employees to cover the costs of their children's education.
What is CEA?
CEA is a monthly financial aid provided by the government to its employees. It can be used for expenses such as school fees, books, uniforms, and hostel expenses.
For how many children is the benefit available?
This benefit is available for a maximum of two children in a family. If twins or multiple children are born a second time, this benefit can also be available.
How do you get money?
CEA funds are reimbursed once a year, subject to a certificate from the school confirming that the child attended that school for the previous year.
How much allowance do you get?
₹2,812.5 per month for each child, ₹8,437.5 per month for hostel accommodation, as of 2024. This amount is fixed, regardless of your actual expenses.
Which children are eligible for this?
- The child must be below 21 years of age
- The age limit for disabled children is 22 years.
- Nursery to 12th grade students
- For the first 2 years of Diploma/Certificate course
- Students studying through distance or correspondence are also included
Which schools are accredited?
The child should be studying in a school/college that is recognized by the government, such as CBSE, ICSE, State Board or AICTE affiliated institutions.
What new things did the government clarify?
The government has said that if a child has to repeat a class due to the New Education Policy (NEP 2020), he can avail the benefit of CEA for that year also (as a one-time relief).
What will happen in case of suspension or court case?
If an employee is suspended or rejoins service after a court order, they may still receive CEA, subject to certain conditions. This will depend on how the period is considered.
Overall, CEA is a significant benefit to government employees, helping them defray the cost of their children's education, and the new rules have made it even easier and clearer.