This time of the year, parents are busy planning for admission of their wards to the school of their choice and students are busy packing their bags and working up the assignments and homework. Though, this year the Covid-19 situation has made them access their school online. The school fees have to be paid and parents are getting e-mails about that. We should know that paying school fees reduces our tax burden and we should not forget to claim that as a deduction from taxable income. So, please keep your school fees receipts safe so that our tax experts get that deduction while filing your I-T Return.
How much deduction is eligible against school fees payment?
You must have heard about ‘80C’ deductions. Yes? School fees are one of the components of those deductions with insurance premia, PPF, EPF, FDR, NSC, etc. The maximum limit for such aggregate investments and payments is ₹1,50,000/-. For example, your investments and payments in respect of insurance premium, EPF, PPF, etc., aggregate to ₹100,000/- and in this particular year you have paid school fees of about ₹60,000/-, you can claim ₹50,000/- from school fees as a deduction. In case, you have no other major deductions, you can claim entire school fees as a deduction from your taxable income.
For how many children this can be claimed?
This deduction can be claimed on school fees paid in respect of only two children. If you have paid school fees for more than two children, you may claim the maximum aggregate amount in respect of any two children. For example, if you have three children and you paid school fees of ₹30,000/-, ₹40,000/- and ₹50,000/- for each of them, respectively. Then you should claim a deduction in respect of ₹90,000/- (₹40,000+₹50,000).
Which fees can be claimed as deduction?
While taking admission or during the year too, a school might ask you to contribute donations for the development of the campus, building fund or other donations, etc., besides tuition fees. You can claim deduction only in respect of tuition fees and not in respect of any other fees/donation. However, you may ask the school whether such payments are eligible for deduction u/s 80G so that you are able to claim that deduction separately in your I-T Return.
Can late fees be included for deduction?
No. Payment of late fees is not a tuition fee. The tuition fee is the amount that is uniformly sought by the school from the students. Late fees are a penal charge.
Can both the parents claim the deduction for school fees?
Both the parents can claim the deduction if the amount of school fees paid is not absorbed for deduction by one parent. For example, if both parents are working and they paid ₹2,50,000/- as school tuition fees in respect of their child/children. One parent can claim the maximum amount up to ₹1.5 lakhs, and the remaining amount of ₹1,00,000/- can be claimed by other parents as a deduction. But the same amount of fees can not be claimed by both the parents.