capital gain - 80E deduction allows deducting interest on payment of loan taken for higher studies. Does that also apply if the loans were taken from american institutions - banks and universities?
7 Replies
Rahul Suneja
(CA-Final, CS-Exec)
(215 Points)
Replied 02 October 2011
yes the loan can be taken from american institutions but only from notified institutions or banks
* Krishna *
(CA Student)
(6149 Points)
Replied 02 October 2011
In my opinion, if a loan is taken outside India for higher studies and any interest is paid during the previous year, such interest payment is not eligible for deduction under income tax act.
Financial Institution means any approved FI by central government or a Banking Company to which the Banking Regulation Act, 1949 applies. So, the higher study course should have been from a board or university as recognised by central/state governement/local authority. Course must be a full-time program.
Hence, with regard to your query, Section 80E benefit is not available as it has taken from american bank or univeristy. Please correct me if i am wrong.
CS RAJESH C.CHOUDHARY
(ASSISTANT MANAGER)
(14607 Points)
Replied 02 October 2011
Payment of interest of Education loan taken for higher deduction of self or spouse of children: without any maximum limit of payment.
Yes it's deductible u/s 80E.
All the best 
CA Mukul Mittal
(CA in practice)
(384 Points)
Replied 03 October 2011
under section 80E, it is not specified whether the loan should be borrowed from FI's in India only.. therefore, deduction is allowed.......
Arniv Sharda
(CA Final)
(3006 Points)
Replied 03 October 2011
| Originally posted by : Krishna | ||
 |
In my opinion, if a loan is taken outside India for higher studies and any interest is paid during the previous year, such interest payment is not eligible for deduction under income tax act. Financial Institution means any approved FI by central government or a Banking Company to which the Banking Regulation Act, 1949 applies. So, the higher study course should have been from a board or university as recognised by central/state governement/local authority. Course must be a full-time program. Hence, with regard to your query, Section 80E benefit is not available as it has taken from american bank or univeristy. Please correct me if i am wrong. |
 |
i agree with krishna
according to me it should not be allowed
but we should wait for some more replies
cheers
ProgTick
(N/A)
(100 Points)
Replied 03 October 2011
would this still apply if the person is US citizen of Indian origin?
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 03 October 2011
"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;
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check that the bank is regularized under banking regularion act 1949
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