Deduction u/s 80e of income tax act

foreign loans are not covered under section 80E.

Thank you all but it is not mentioned in the Act that Loan must be taken from India only, can i read it somewhere...?

Dear Swati,

As per Section 80E of Income Tax Act,1961 

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 interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education.

Now your question is that if the loan is taken outside India then it is exempt or not. 

For this we need to see the definition of Financial Institution as the interest on loan taken from financila institution only is exempt from tax.

As per section 80E,

“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;

Obviously, Banking Regulation Act is applicable only on Indian Finacial Institutions.

So the deduction is not available if it is taken from US.

Regards

Rohit Gupta

RHT1203 @ GMAIL.COM

Yes ..Thank you CA rohit Gupta for such a nice and quick answer....this is really helpful and i also disposed of this issue with the help of all...Keep answering like this so that new practitioners can also do the work efficiently...