Income Tax Exemption for Education Loans Under Section 80E

In this article I will be writing about the Income Tax exemption for the education loans. Earlier I have written few articles about the education loans in India and the new interest free education loans announced by the RBI. Many of us not aware of the tax exemption on the interest amount paid for the education loans. This article explains the topic in detail. Please post your doubts and feedback in the comments section. Please subscribe to our future articles here.

Reap the benefits of education loans

Tax Exemption on Section 80E

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 or for the purpose of higher education of his relative

  • Here the relative means his/her spouse and children.
  • The deduction is allowed from the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest is paid by the assessee in full, whichever is earlier.
  • Higher education means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognized by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so.

Summary

I hope this is very use for the parents who took the education loan towards their children. Note that the principal payment is not exempted from the tax. If you have any doubts please post it in the comments section.

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Comments

  1. Amit kumar says

    i got education loan for myself and i m paying interest pm can i get benifit in computation of incometax.My dad salary is 180000/annum.

  2. venkat says

    Sir,
    I had taken education loan for my wife on 2009 may and i am paying the intrest regularly in may.I had claimed the interst for 2009-2010 FY by taking a letter from the bank for the interset till march 31st.but the intrest is paid in may.the auditors are saying that we should not apply without paying to the bank.

    • Gurumallappa says

      My friend got education loan from bank on 2005 now he is paying interest amount of Rs 95000/- he is eligible exemption from income Tax u/s 80E?.

    • Gurumallappa says

      My friend got education loan from bank on 2005 now he is paying interest amount of Rs 95000/- he is eligible for exemption from income Tax u/s 80E?.

  3. Souvik Chatterjee says

    My annual salary is 3 lac. I have paid rs-26000 interest on education loan from April 2012 to January 2013.
    Do I have to pay any tax after submitting this loan statement?

    Regards
    Souvik

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