TDS on school fees reimbursement

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Kailash

Director

21 Points Posted on 23 October 2009

Dear All

My employer had agreed for school fees reimbursement as one time basis due to transfer from one city to another. WIll the TDS be applicable on such a reibursement? I was wondering since this is not an income there should not be any TDS. Will I ab able to get the Income tax refund at the time of final assessment/return filing. Thanks for the clarification

Replies (2)

CA Suri Kota

Assistant Manager @ EY

856 Points Posted on 23 October 2009

Dear Sir,

Eventhough it is school fee reimbursement, as the employer is paying you , it comes under part parcel of other perquisites under salary. Hence it is includable in salary.......and hence TDS has to be deducted on that amount ..

Sunil

Trader

2253 Points Posted on 23 October 2009

Whether your employer reimburses you the school fees for your children or pays it directly to the school, it is perquisite in your hand and taxable.

Certain components of the school fees qualify for deduction u/s 80C to the extent of ceiling of Rs.1,00,000/-. If you pay your schoolfees and give the receipt copy tothe employer, He can consider the deduction u/s 80C at the time of calculating TDS for you. Even if he does not consider the deduction and deducts more tax, you can claim the deduction in your returns.

As you are being transferred it seems that your reimbursement is on account of the school fees you are losing due to the transfer and he is reimbursing to you school fees in the new school. I am not sure whether you can claim 80C for the entire school tuition feesas you wouldbe paying fees for more than 12 months in total including what you are losing at the old school. This will have to be checked.