Parents are busy making plans for their children’s entrance to the school of their choosing at this time of year, and kids are busy packing their bags and completing their schoolwork and assignments. However, this year’s Covid-19 scenario forced them to access their education via the internet. Emails are being sent to parents reminding them that school fees must be paid. We should be aware that paying for our children’s education lowers our tax liability, and we should be sure to deduct that expense from our taxable income. Therefore, please keep your receipts for school fees secure so that our tax professionals can deduct them when you file your I-T Return.
How much of a deduction from the payment of school fees is allowed?
You must be familiar with “80C” deductions. Yes? One of the deductions, along with insurance premiums, PPF, EPF, FDR, NSC, etc., is made up of school fees. The top limit for these total investments and payouts is 150,000 rupees. If, for instance, your investments and payments total $100,000 and you paid around $60,000 in school expenses this year, you can deduct $50,000 from your investments and payments for insurance premiums, EPF, PPF, etc. If you don’t have any other significant deductions, you can deduct the full cost of your education from your taxable income.
How many children may this be claimed for?
Only two children’s worth of school expenses may be deducted under this provision. If you have paid for the education of more than two children, you may be eligible to receive the maximum combined sum for any two children. For instance, suppose you have three kids and spent $30,000, $40,000, and $50,000 in school fees for each of them, accordingly. Then you must subtract 90,000 (40,000 + 50,000) from your income.
What fees are eligible for a deduction?
In addition to tuition costs, a school may request donations from you during the admissions process or throughout the academic year for the construction fund, campus development, or other purposes. You may only deduct tuition costs; you may not deduct any other fees or donations. To be able to claim that deduction separately in your I-T Return, you might ask the school if such payments qualify for a deduction under Section 80G.
Is it possible to deduct late fees?
No, paying late fees does not count as paying tuition. The sum that the school consistently demands from the pupils is known as the tuition fee. Late fees constitute a penalty.
Can both parents deduct school-related expenses?
If the cost of the child’s education cannot be deducted by just one parent, then both parents may claim the deduction. For instance, let’s say that both parents are employed and that they each paid $2,50,000 for their respective children’s school tuition. One parent is allowed to deduct a maximum of 1.5 lakh rupees, while additional parents are allowed to deduct the remaining 1,00,000 rupees. However, neither parent may claim the same amount of costs.
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