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80E maximum limit
what is the maximum limit of interest on Education Loan in 80E
Replies (2)
Quick Summary
Hello,
As such there is no limit for claiming deduction of interest u/s 80E.
However, i have reproduce few important provision for your reference.
Only individuals are eligible for tax deductions, Hindu undivided families (HUF) and companies cannot avail deductions under this section. Also, loans taken from friends or relatives are not eligible under this section.
Income Tax Deduction can be claimed only on the interest component.
The benefit can be claimed by the parent as well as the child, which means that the person who pays the education ?
As such there is no limit for claiming deduction of interest u/s 80E.
However, i have reproduce few important provision for your reference.
Only individuals are eligible for tax deductions, Hindu undivided families (HUF) and companies cannot avail deductions under this section. Also, loans taken from friends or relatives are not eligible under this section.
Income Tax Deduction can be claimed only on the interest component.
The benefit can be claimed by the parent as well as the child, which means that the person who pays the education ?
The deduction allowed is the total interest part of the EMI paid during the financial year.
There is no limit on the maximum amount that is allowed as deduction.
You, however, need to obtain a certificate from your Bank. Such certificate should segregate the principal and the interest portion of the education loan paid by you during the financial year.
The total interest paid will be allowed as a deduction.
No Tax benefit is allowed for the principal repayment.
--------
Period of deduction
The deduction for the interest on loan starts from the year in which you start repaying the loan.
It is available only for 8 years starting from the year in which you start repaying the loan or until the interest is fully repaid whichever is earlier.
This means if the complete repayment of the loan is done in 5 years only, then tax deduction will be allowed for 5 years and not 8 years.
It should also be noted that if your loan tenure exceeds 8 years, then you cannot claim a deduction for the interest paid beyond 8 years. So it is always advisable that an education loan is paid within eight years.
There is no limit on the maximum amount that is allowed as deduction.
You, however, need to obtain a certificate from your Bank. Such certificate should segregate the principal and the interest portion of the education loan paid by you during the financial year.
The total interest paid will be allowed as a deduction.
No Tax benefit is allowed for the principal repayment.
--------
Period of deduction
The deduction for the interest on loan starts from the year in which you start repaying the loan.
It is available only for 8 years starting from the year in which you start repaying the loan or until the interest is fully repaid whichever is earlier.
This means if the complete repayment of the loan is done in 5 years only, then tax deduction will be allowed for 5 years and not 8 years.
It should also be noted that if your loan tenure exceeds 8 years, then you cannot claim a deduction for the interest paid beyond 8 years. So it is always advisable that an education loan is paid within eight years.
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