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Education loan - Income tax benefit

Kumar (mm) (45 Points)

24 May 2011

Hi,

Sub : regarding the income tax benefit on the interest paid on educational loan. what is the eligibility (for which all courses this is applicable)? is it applicable for school education also?

pls let me know

regards

Kumar

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CA Jignesh Kotak (CA) (86 Points)
Replied 24 May 2011

Repayment of loan taken as a student for pursuing higher studies (Sec. 80E)

Any repayment of the principal amount of loan taken from a financial institution or a recognised charitable organisation for higher studies and interest thereon is allowed as a deduction upto a maximum amount of Rs. 40,000/- in a year. The relief is available to persons who have undertaken graduate or post graduate courses in any branch of engineering, medicine or management or post-graduate courses in any university in pure sciences, applied sciences, mathematics or statistics. This deduction is allowed for a maximum period of 8 years beginning with the year in which repayment starts.