1. Parenting encompasses both joy and significant responsibilities, particularly in the realm of financial planning to ensure a secure future for children. On this Universal Children’s Day, we aim to alleviate some of these responsibilities by outlining the various Income Tax benefits available to parents. These benefits can facilitate tax savings while also aiding in the planning of expenses related to education, healthcare, and investments for children.

2. Under Section 10 of the Income Tax Act, parents can claim specific exemptions for children’s education and hostel allowances. The Education Allowance permits a claim of Rs. 100 per month for each child, applicable to a maximum of two children, while the Hostel Expenditure Allowance allows for Rs. 300 per month per child, also limited to two. Although these amounts may seem modest, they can contribute to offsetting education-related costs.

3. Additional tax benefits include exemptions for income earned in a child’s name under Section 10(32), which allows for a rebate of up to Rs. 1,500 annually per child. Furthermore, parents can benefit from deductions on education loan interest under Section 80E, with no upper limit on the deductible amount for up to eight years. Health insurance premiums for children are also deductible under Section 80D, allowing for claims up to Rs. 25,000, thereby enhancing financial security for families.