80E deduction for loan taken for higher education

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This discussion clarifies whether interest paid on a loan taken from a UK-based institution for higher education is eligible for deduction under Section 80E of Indian Income Tax Act. The consensus is that such interest is generally not deductible because the UK lender is not covered under the Indian Banking Regulation Act, 1949, nor is it a financial institution specifically notified by the CBDT for this purpose. Only loans from notified Indian institutions like HDFC Ltd and Credilia Financial Services are eligible.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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14 September 2021 Dear Sir,

One of my client has taken loan from a UK based institute for higher education and paying interest on this loan through NEFT from an Indian bank account.

Is the interest component of this loan eligible for claiming deduction U/s. 80E even if the loan is taken from abroad. Do he has to obtain any documentary proof.

Please help me in this matter.

Regards,
Divyesh Jain

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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14 September 2021 No, because the lender is not covered under Banking Regulation Act,1949 or not an institution notified by CBDT.
Ps. Notified institutions are HDFC Ltd and Credilia Financial Services P Ltd.

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DIVYESH JAIN

DIVYESH JAIN (Querist)
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14 September 2021 You mean no abroad universities are eligible for claiming 80E deduction. Only HDFC and Credilia financial are eligible for deduction.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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15 September 2021 The loan was taken from Prodigy Finance in UK. Is it eligible for 80E deduction interest component.

Please help me in this matter.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 September 2021 The UK based Prodigy Finance is not covered under Indian Banking Regulation Act,1949; nor an institution notified by CBDT ( Which are Only HDFC and Credilia financial).
Hence, loan taken from the Prodigy finance is not eligible for claiming deduction u/s. 80E of IT act.

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