Training of employees – Amount spent for providing free education facilities to, and training of, the employee is not taxable.

Fixed education allowance for children – Fixed education allowance given in cash by the employer to the employee to meet the cost of education of the family members of the employee is not taxable to the extent of Rs. 100 per month per child (for a maximum of 2 children). An additional exemption is available in respect of allowance granted to meet hostel expenditure at the rate of Rs. 300 per month per child for a maximum of two children. The remaining amount is taxable in all cases (that is in the hands of specified as well as non-specified employees).

Payment of school fees of employee’s children – School fees of the family members of the employee paid by the employer directly to the school is taxable as a perquisite.

Reimbursement of school fees of employee’s children – Reimbursement of expenditure incurred for education of the family members of the employee is taxable as a perquisite. Any such reimbursement of tuition fees to the central government employee is, therefore taxable.

Education facility in employer’s institute – Where the educational institution is owned and maintained by the employer and educational facility is provided or where such educational facility is provided in any institute by reason of employee’s employment with the employer-

(a) Where educational facility is provided to employee’s children –

(i) Where the cost of education or value of such benefit does not exceed Rs. 1000 per month per child (no restriction on number of children)- Amount chargeable to tax will be Nil;

(ii) Where such amount exceeds Rs. 1000 per month per child – Amount chargeable to tax, cost of such education in a similar institution in or near the locality less Rs. 1000 per month per child less amount paid or recovered from the employee

(b) Where educational facility is provided to a member of his household (other than children) – Amount chargeable to tax, cost of such education in a similar institution in or near the locality less amount paid or recovered from the employee.

Scholarship – Amount of scholarship given by the employer-company to children of its employee solely at its discretion without reference to terms of employment is not assessable as perquisite in the hands of employee.