Parents in India can avail several tax benefits under the Income Tax Act, 1961. Section 10 allows exemptions for children’s education (up to ₹100 per month per child) and hostel allowances (up to ₹300 per month per child) for two children. Additionally, under Section 10(32), income earned in a child’s savings account is exempt up to ₹1,500 annually. Parents can also claim deductions under Section 80E for interest paid on education loans taken for their children’s higher education, with no upper limit and up to 8 years of repayment. For health-related benefits, Section 80D provides a deduction of up to ₹25,000 for health insurance premiums paid for children. Furthermore, Section 80U offers deductions of ₹75,000 for children with disabilities and ₹1,25,000 for severe disabilities. Finally, under Section 80DDB, parents can claim deductions of up to ₹40,000 for medical expenses related to specific serious diseases. These provisions help reduce the tax burden for parents supporting their children’s education and healthcare needs.
Here are some tax benefits for parents under the Indian Income Tax Act:
Tax Benefits
| S. No | Particulars | Section | Amount | Explanation |
| 1. | Children’s Education and Hostel Allowance | (Section 10) | up to ₹100 per month per child for two children) and hostel expenditure allowance (up to ₹300 per month per child for two children | Parents can claim exemptions for education allowance (up to ₹100 per month per child for two children) and hostel expenditure allowance (up to ₹300 per month per child for two children). |
| 2. | Children’s Savings Accounts | (Section 10(32) | up to ₹1,500 per child annually | Income earned in a child’s name is exempt from tax |
| 3. | Education Loan Interest Deduction | (Section 80E) | deduction on the interest paid for an education loan | Parents can claim a deduction on the interest paid for an education loan taken for their child’s higher education, with no upper limit on the amount and available for up to 8 years from the start of repayment. |
| 4. | Health Insurance Premiums | (Section 80D) | up to ₹25,000 per year | Parents can claim deductions for health insurance premiums paid for their children, up to ₹25,000 per year |
| 5. | Medical Expenses for Disabilities | (Section 80U) | ₹75,000 with disabilities and ₹1,25,000 for severe disabilities | Deductions of ₹75,000 for children with disabilities and ₹1,25,000 for severe disabilities |
| 6. | Medical Expenses for Serious Diseases | (Section 80DDB) | up to ₹40,000 for medical expenses | Deductions of up to ₹40,000 for medical expenses related to specific severe diseases |
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