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"Children’s Educational And Hostel Allowances Exempt From Tax Up To A Certain Limit"

 

In exercise of the powers conferred by Section 10(14)(ii) of the Income Tax Act the Rule 2BB specifies various allowances which would be completely exempted from tax subject to the limit mentioned therein.

One such allowance which would be completely exempted from tax is the children’s education allowance up to 100 per month per child up to a maximum of 2 children.

Likewise, any allowance granted to an employee to meet the hostel expenditure of his child would be completely exempted from income tax up to 300 per month per child up to a maximum of 2 children.

Besides, any allowance granted to an employee working in any transport system to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another is also completely exempted from income tax upto 70 per cent of such allowance upto a maximum of 6,000 per month.

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