The Indian government has announced a substantial increase in tax-exempt limits for child education and hostel allowances, enhancing the benefits for salaried parents. The new limits allow for a child education allowance of up to ₹3,000 per month per child and a hostel allowance of ₹9,000 per month per child, applicable for a maximum of two children. This means that parents can now claim a total annual exemption of ₹2.88 lakh (approximately $3,500 USD), which can significantly reduce their taxable income. However, these exemptions are only available to salaried individuals whose allowances are included in their salary structure and are limited to those who have opted for the old tax regime. For taxpayers in the 30% tax bracket, this exemption could lead to a tax saving of approximately ₹83,520 (around $1,000 USD) annually, making the old tax regime more appealing for those eligible. It's crucial for parents to ensure that their salary structure includes these allowances to benefit from the revised limits.