I have a query, sir that my daughter had gone to the USA three yrs ago to pursue higher studies availing an education loan from a bank. After finishing her studies, she has been employed in an NGO in the US for the last one year. She has been paying her education loan EMI’s since getting the employment by remittance directly to the bank where she also holds her saving account. She has no income in India, except some bank interest.
Please advise if she’s entitled to avail the benefit/refund under section 80E of income Tax Act. If so, which Return form she needs to file and whether it could be filed on line.
27 April 2014
Yeah if the interest from the bank deposits are exceeding the basic exemption limit of Rs. 2 lakhs, she can take the deduction u/s 80E and reduce the income by an amount of interest paid. If interest amount is less than Rs. 200000 then its of no help. She can use form ITR1.
Regards, Santosh G Kalburgi Cost Accountant 9742022309
29 April 2014
No, first of all the deduction is for payment by way of INTEREST and NOT on principal amount. Secondly such interest shall be paid out of INCOME CHARGEABLE TO INCOME TAX since ur daughters income is not taxable in India thus such remmitance shall not be governed by section 80E. Lastly, its of no use if ur daughter dont have any taxable income in india.
30 April 2014
Santosh, the view laid down under sec 80E is that the remmitance towards interest shall be out of income chargeable to tax in India. In the present case remmitance out of foriegn,income which is not taxable in India thus even if her interest income exceeds 2L she will not,get benefit us 80E however if she pays interest out her chrgeable interest income(as its the only income she is earning in India) then definetly she could have claimed 80E.
CAclubindia
