The Position of the Hole on a Garment with Tassels or Fringes
If the tzitzis hole tore
If tzitzis were put a proper distance from the edge of a garment but then the hole or hem ripped enough to bring them less than one kesher godol from the edge, the tzitzis remain kosher. The Torah mandate of "they shall put tzitzis on the corners" only requires that this condition be met when the garment is first made.
(סעיף י וס"ק נ)
Reinforcing the hole and the hem
Although a properly made garment remains kosher if the hole stretches, there is a concern that an observer might mistakenly assume that tzitzis can be made like that to begin with. Therefore, it is customary to reinforce the edge of the garment and the area around the hole so as to prevent ripping.
(סעיף י וס"ק נא)
The position of the hole on a garment with tassels or fringes
Many taleisim have knotted fringes around their edges made from leftover warp threads. These are not considered part of the garment and the tzitzis should not be placed in this area. The 'three finger' shiur is measured from the end of the fringes and not from where they meet the garment. According to the Mechaber the shiur of kesher godol is measured from the end of these fringes, whereas according to the Rama it is measured from the start of the actual garment. To avoid the machlokes, the area of the corners should ideally be free of any such fringes.
(סעיף יא וס"ק נד ו־נז)
The hole for inserting the tzitzis must be in the area called 'kanaf,' near the edge of the garment. This area extends three 'finger-spaces' from the edge.
In order to keep the hole in the area of kanaf and not on the actual edge, the hole should be removed from the edge at least one kesher godol-the space between the thumb's nail and the first joint.
The popular custom is to make only one hole for inserting the tzitzis into the garment on both the talis gadol and talis koton. There is a custom to make two holes based on an opinion of a Rishon cited by the Beis Yosef as well as on the practice of the Arizal.