Education loan u/s 80e
This query is : Resolved
20 March 2013
My friend taken a education loan for his son in may 2005 rs.1.5 lacs he was start is repayment in 2005 and paying the interest rs.50000 up to 2011-12 and in the current year 2012-13 in may 12 paid the full & final amount of loan. he was not claim the interest u/s 80E my question is can he claim the hole interest amount in from 2005 to 2012, in the current year ie 2012-13.
20 March 2013
I dont think so. The interest should have been claimed in the relevant assessment year.
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21 March 2013
He cannot do so... Since the expression used u/s 80E is... " The interest on loan paid during the previous year(I.e. Financial year)"
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21 July 2013
The limits are fixed and the experts are right. The provisions are reproduced below:
Section 80E- DEDUCTION IN RESPECT OF REPAYMENT OF LOAN TAKEN FOR HIGHER EDUCATION.
(1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan :
Provided that the amount which may be so deducted shall not exceed twenty-five thousand rupees.
(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until loan referred to in sub-section (1) together with interest thereon is paid by the assessee in full, whichever is earlier.
(3) For the purposes of this section, -
(a) “Approved charitable institution” means an institution specified in, or, as the case may be, an institution established for charitable purposes and notified by the Central Government under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;
(b) “Financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(c) “Higher education” means full-time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics 1002f ;
(d) “Initial assessment year” means the assessment year relevant to the previous year, in which the assessee starts repaying the loan or interest thereon.
Section 80E- DEDUCTION IN RESPECT OF REPAYMENT OF LOAN TAKEN FOR HIGHER EDUCATION.
(1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan :
Provided that the amount which may be so deducted shall not exceed twenty-five thousand rupees.
(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until loan referred to in sub-section (1) together with interest thereon is paid by the assessee in full, whichever is earlier.
(3) For the purposes of this section, -
(a) “Approved charitable institution” means an institution specified in, or, as the case may be, an institution established for charitable purposes and notified by the Central Government under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;
(b) “Financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(c) “Higher education” means full-time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics 1002f ;
(d) “Initial assessment year” means the assessment year relevant to the previous year, in which the assessee starts repaying the loan or interest thereon.
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