Education loan interest and repayment

Dear Shikhar....

Please see this link...........

https://www.caclubindia.com/forum/educational-loan-72783.asp

Dear Shikhar,

Who took the loan?

You will get the tax benefit on an education loan only if the loan is in your name. You cannot claim the tax deduction if the loan is taken for someone else, be it your spouse or children or even a sibling. Only the person for whom the loan is valid will get the tax benefit.

So, if you take an education loan, you -- and not your parents or whoever took the loan -- will get the tax benefit when you start repaying it.

The tax benefit

If you take an education loan, you can claim deduction under Section 80E of the Income Tax Act. You will get a tax benefit on the interest you pay.

Initially, there was a limit on the tax benefit. The lesser of the two amounts would be valid for deduction:

i. Total amount paid during the year (principal repaid and interest paid)

ii. Rs 40,000

Hence u can't claim the tax benefit of the loan.

regards,

ratan