Hi all. I have a query regarding the income tax benefits for my education loan
I had taken my education loan for my four-year Bachelor's degree, with its last LOAN DISBURSEMENT DEBIT done in the month of January 2018. As per the bank's directive, the amount loaned was charged with simple interest till the end of the year 2019, and from the beginning of the year 2020, the compound interest would apply.
In order to keep the interest amount as low as possible, I paid the entire principal payment by the end of the year 2019.
Now, at the beginning of the year 2020, the bank created a debit of the entire accrued interest amount till the year 2019, but did not initiate an EMI. Instead, it started adding the interest on the already accrued interest amount, thereby increasing the balance. So I started partially paying off some amount in my loan account periodically in order to avoid huge interest accumulation.
The bank refuses to initiate an EMI, saying that I have already made a huge payment in my loan account, and hence the EMI would be initiated when the amount reaches the value if I had not made the partial payments.
Based on the above situation, I need to know the following:
- Is the partial payment on the interest amount tax relatable under section 80E or any other section of the IT Act?
- Is the monthly interest charged on the already accrued interest tax relatable under section 80E or any other section of the IT Act?
Thank you so much in advance for reading this through. Would greatly appreciate any guidance on this.
CAclubindia
