Tax Deduction for Education Loans
- 5 Comment
Introduction
It is common that students seeks loans for their education. Many people not 
aware that the education loans can be used for the tax deductions. From April 2007, the loans taken by self or parent or spouse is also deductible under the tax. In this article I will be writing about the tax deduction for education loans. Please post your feedback after reading the article. You can subscribe to our future articles here.
Key Points on Education Loans
- You can claim a deduction under section 80 E for the interest paid on an educational loan.
- You can claim the tax benefit only if the loan is taken in your name for the higher education yourself, spouse or children. The loan taken for brothers or sisters cann not be claimed.
- Entire interest amount is deducted from the taxable income without any limit.
- Principal repayment of the education loan will not be eligible for the tax deduction.
- You can claim tax benefits for eight years after start paying the loan.
- You can claim the tax benefit only when the loan is taken from the financial institutions. If you have taken from family or employer, then it is not eligible for the tax deduction.
- The course has to be for full-time studies (no part-time courses covered) for any graduate or post graduate course in engineering, medicine, management, or for post graduate course in applied sciences or pure sciences including mathematics and statistics.
- You can find interest rates for education loans.
Summary
In this article I have listed the few important points on the education loans in India. Many banks offer education loans( eg. hdfc bank) to the students, it will be useful if you know the tax benefits on education loans. Thank you for reading this article. If you have any doubts please post it in the comments section.
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5 Comments on this post
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Raghu said:
I have started paying back my education loan from 2007-08 financial year. Can I claim a tax deduction as part of this financial year (2008-09). Is it mandatory that I should claim it in the same year of payment?
Thank you,
RaghuJune 11th, 2009 at 12:11 am -
Krishnan KC said:
I have taken an educational loan for my son for his Engineering Course. The loan will be repaid by my son after the course only from 2010-11 onwards. But I have paid the interest portion since the payment of loan instalments to the institute have commenced from 2006-07 & 2007-08 . I have not claimed any exemption on interest amount so far. I got the certificate from bank this year for the interest paid by me so far. I have filed the IT return for the fin year 2008-09 and have not claimed the rebate on int amount. Can I file a revised return and claim the benefits? Which Form should be used for filing? ITR-1 is the form for me as I am an Individual (Govt Employee), but there is no column to reflect the deduction amount. P, advise accordingly.
Thanks & regards.
KrishAugust 18th, 2009 at 9:50 am -
deepak saraiya said:
Hi,
i am doing parttime MBA froM TIMSR mumbai
BOB has sanctioned my Education loan
can i claim tax rebate for self education from my total salary incomeplease advise
DeepakSeptember 30th, 2009 at 3:43 am -
ujjwal shaikh said:
PLEASE ADVISE ME TO CLAIM TAX DEDUCTION OR WAIVER IN EDUCATIONAL LOAN TAKEN FROM UNITED BANK OF INDIA.
March 11th, 2010 at 8:30 am -
Prabhat said:
Education Loan has been sanctioned by state bank for higher studies of my son on my application. The loan amount was paid thru a joint account in the name of Son & Father. Now can I claim tax benefit for the interest paid by me from my taxable income to this Education loan Account.
March 24th, 2010 at 3:16 am
