80C and 80E

Originally posted by : Sasidhar Aruljothi
	Friends, Where an assessee has availed an educational loan, the interest is exempted u/s 80E. Is the educational fees paid through the loan exempt u/s 80C. Also is there any condition that the educational expenditure must be incurred by the asseesees. If so can the assessee claim an exemption as he will incur the expenditure by way of paying back the educatinal loan. Please clarify........

80E applies for self ( interest paid on educational loan)

80C apply for the "tution fees" for  children , not for assesee 

The assessee pays tuition fees for his children only..........the educional loan is for his children's education......

In that case Assessee cant claim 80E he can claim only 80C.

As 80E applies for self.

Thanks

R Shriram

as per sec 80E Education loan taken can be for self or relastives." Relatives mean spouse of the individual, children or student for whom the individual is the legal guardian.....

ya i am sorry your correct the assessee can claim both 80C & 80E.

Greatest Thanks

R Shriram

my doubt - Assessee has availed a loan and   paying fees....still is he eligible  for 80C  benefit?

Yes in 80E only interest portion is exempted not the amount repayment. So u can cliam both 80C & 80E & ther is no rule that we should not claim both.

Regards

R Shriram

my opinion.80 c applies to assesse in the status  either mother or father and payment of fees for his kids (max 2.)

80 E is for INTREST ON LOAN ONLY.HERE ASSESSE MEANS SELF,GUARDIAN OF KID,PARENTS OF KID.SPOUSE.here no limitiitaion on number of kids,unlike 80 C.

Difference being in case of 80 c assesse is not student in case of 80E assesse can be student.

80C is related to "tution fees" paid during the year, so u can claim the only portion of "tution fees" paid during the year from your taxable income, 

80E reflects to interest paid on loan taken for self education.

80C is related to "tution fees" paid during the year, so u can claim the only portion of "tution fees" paid during the year from your taxable income, 

80E reflects to interest paid on loan taken for self education.

Aforesaid openion is right.

U/s 80E the deduction on interest on loan taken for higher education is available to an individual assessee for "loan must be of assessee himself or any of his relatives" ( relatives here means the spouse, the children or a student to whom the assessee is the legal guardian)

No such upper limit Qantum of deduction. Ita the amount paid as Interest on such loan.

U/s 80C the fees paid by an individual assessee is strictly limited to tution fees paid on the full time education of any two children to the university, college, school or any other educational institution

You can get the tax deduction for your own or spouse’s or children’s higher education provided the payment is made out of the income chargeable to tax. Nowdeduction is also available to a legal guardian for the child’s education w.e.f. asst. year 2010.11

From asst. year 2010-11 “higher education” means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any School, Board or University recognized by the Central Government or State Government or Local Authority or by any other authority authorized by the Central Government orState Government or Local Authority to do so.

Up to asst year 2009-10 “Higher studies” 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;

For asst. years 2006-07 and 2007-08, the tax deduction on education loan orstudent loan was available only for your own higher education not for spouse or children”

Period of Deduction on Education Loan

The tax benefit shall be available for maximum period of 8 consecutive assessment years beginning from the assessment year in which the assessee starts paying the interest on the loan.

The tax benefits on education loan are only valid once you start the repayment and moreover they are only available up to eight years. For instance if your loan tenure exceeds eight years, you cannot claim for deductions beyond eight years.

Hence it is better that the education loan is repaid within eight years. Unless if the loan amount is very high and it is difficult to afford a high amount of equated monthly installment (EMI), one should not opt for education loan with longer tenure.”

Maximum Limit of tax deduction u/s 80E of Education Loan

From assessment year 2006-07, the entire payment of interest will be allowed asdeduction during 8 consecutive assessment years beginning from the year in which payment of interest has began.

Deduction is available only for repayment of Education loan only

From assessment year 2006-07, the tax deduction on loan is available only forinterest payment, not for principal payment of loan. However, it was an allowablededuction up to assessment year 2005-06.

Approved charitable institution means an institution specified in, or, as the case may be, an institution established for charitable purposes and [approved by the prescribed authority] under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G(2)(a);

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;

Tution fees: payment made as tution feees to any unversity,college, or schol or educational institution situated in india for purpose of full time educationin respect of any two childeren of assessee.-----section 80C

where as 80E is for availing deduction for interest on loan taken for higher education.....The amount shall actually paid out of the income of the assessee chargeble to tax during the previous year...

agree with u s sharma