We run a school and have late fee fine of Rs 50, fee deposit time is from 1st to 30th of every month, if the parents do not pay fee in time, we take fine of Rs 50. The fine is to make them pay fee on time. The fine money is not used by school but is spend in charity only like fee, books and uniform for poor. Is it allowed to charge late fee? Many parents do not pay fee for many months and some even for more than 1 year.
بسم الله الرحمن الرحيم
(Fatwa: 874/827/SD=9/1438)
Late fee is a kind of financial penalty and financial penalty is not lawful according to Shariah.
Allah knows Best!
Darul Ifta,
Darul Uloom Deoband