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Section 80E of the Income-tax Act, 1961 provides that in computing the total income of an individual, their shall be allowed a tax concession by way of  deduction of the amount paid by way of interest on educational loan taken by him from any financial institution or approved charitable institution for the purpose of pursuing his own higher education or higher education of his spouse, or children, or the student for whom he is the legal guardian.

Deduction under Section 80E is available for eight assessment years beginning with the assessment year in which the payment of interest on such loan is first made or until the interest is paid in full, whichever is earlier. Entire interest amount is allowed as deduction.This deduction is available to every individual who is liable to income-tax.

Tax Concession Education Loan 80E

Under the earlier provisions, the Deduction under Section 80E was available only for pursuing full time studies 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.

The provisions of the aforesaid section 80E were amended vide the Finance (No. 2) Act, 2009 by substitution clause ( c ) of sub-section (3) so as to extend its scope to cover all fields of studies (including vocational studies) 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.

(Republished With Amendments)

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19 Comments

  1. Shubhanka says:

    I am availing education loan jointly with my father (coapplicant) to study master in abroad from hdfc credila.. if the loan is Disbursed through my account.. let me know whether my father can claim tax exemption under section 80e

  2. GURUMURTHI says:

    One more query on SEC 80E.
    My daughter is pursuing her MS(Engg) in Australia. She has taken Educational Loan from a Nationalized Bank in Chennai. She passed out her Higher Secondary & her Graduation in Engineering- both from Board / University- recognized by State Government(Tamil Nadu). Appreciate if any one can clarify me on following:
    i) Whether I am eligible to claim deduction under 80E,
    ii) Is there any requirement that her Present Course needs to be approved by our State/Central Government, for eligibility to claim deduction under 80E.

  3. rm says:

    One more query on SEC 80E.
    The Sec80E states that, any sum paid towards Interest paid on education loan is deductible without any maximum ceiling limit. In case education laon taken in 2014 and interst is payable as per terms of bank agreement after getting job is started repayment from taxable income total overdue/accrued interest from 2014 to 2018 is paid in apr to dec 2018. whether whole interest paid of accrued interest during apr18 to dec18 is claimed as deduction of not. A consultant showing only apr-dec18 value of interest as deduction under Sec80E. Please enlighten what is correct tax planning when there is no restriction on period of interest paid anywhere in the sec80E.

  4. Mudaliar Ganesh T says:

    HI,

    Deduction under sec 80e would be allowed subject to fulfilment of conditions as under;

    1 Deduction would be allowed only for interest paid on such educational loan
    2 Loan should be taken only from banks, financial institutions or approved charitable institutions.
    3 Loan should be taken for full time graduate or pg course on engineering , mediine, management or pg in applied science or pure science.
    4 It is irrelevant whether u persue course in india or outside india.
    5 Interest on loan should be paid only out of the income which is not exempt from tax.
    6 Interest paid can be claimed as deduction only for first Eight years, commencing from first year from which interest is payable/paid

    Hope it is clear

  5. bharat says:

    Dear Pankaj

    if your son is going for education abroad for graduate or postgraduate program related to science and any other mathematics related field then you can take loan as education loan from any bank.

    Bharat Singhal AFP
    8467847063

  6. PANKAJ says:

    I WANT TO TAKE LOAN FOR MY SON,WHO IS WILLING TO STUDY ABROAD.CAN I GET BENEFIT
    OF SEC 80E ? PL REPLY ME SOON
    PANKAJ
    MOB:09825078901

  7. CA Kapil says:

    HI ADITYA,
    UNDER SEC.80E DEDECTION IS ONLY ALLOWED ONLY ON PAYMENT BASIS. AS YOU MENTION THAT YOU HAVE NOT YET PAID ANY RUPEE OF INTEREST , NOW YOU ARE STARTING FOR PAYING SO NOW YOU ARE ELIGIBLE FOR DEDECTION U/S 80E FOR WHOLE INTETEST WHICH YOU HAVE PAID WHTERE AMOUNT RELATED TO EARLIER YEAR’S

  8. CA Kapil says:

    RAM SHINDEY
    YES YOU CAN AVAIL TAX DEDUCTION U/S 80C. AS YOU MENTION THAT YOU ARE CO BOROWER & YOU HAVE TAKEN EDUCATION LOAN FOR YOUR SON(WHETHER MINOR OR MAJOR,THIS COMPARISON IS IRRELEVENT), BUT AS PER BANK POLICY AFTER SON JOB I INTEREST WILL PAYABLE BY SON IN THAT CASE YOU CAN’T AVAIL THE DEDUCTION U/S 80E.

  9. CA Kapil says:

    Hi rahul, as you say that ,you have taken education loan for your brother.
    as per the incometax law deduction u/s 80E is aloowed only for loan applied for In dividual himself or his spouse or his child including adopted child education.
    in your case you have taken loan for his brother so you can’t avail exemption u/s 80E

  10. Rahul Verma says:

    Hi,

    I have taken a education loan for my younger brother study, I am the co-borrower, am I eligible for 80E deduction while computing income tax.

    Regards
    Rahul Verma

  11. RAM SHINDE says:

    I have taken education loan for my son in 2012 I am co-borrower and repaying interest now. After education, my son got job, is it compulsory to pay the loan by him only. I want to repay the loan and avail tax rebate.

  12. ADITYA says:

    i hv taken an education loan in 2010 for my higher studies ,i have not paid any single Rupees to the bank till date . Now i am planning to pay the whole amount with interest in 2014-15 , i want to know that ALL THE INTEREST PAID BY ME IS COMING UNDER TAX SAVINGS SCHEME U/S 80E OR ONLY THE INTEREST OF FINANCIAL YEAR 2014-15.

  13. Govindaraddi Naragund says:

    I took 40,000 rupees loan from vijaya bank for My education.Now i am working in private company .Now i am paying whole amount(amount + interest) once, without EMI. Can i show this amount for tax concession?? Please Reply.

  14. Nidhi Mathew says:

    I have a query regarding S. 80 (e) Exemption under the IT Act. I availed an education loan in 2010 and have started working now. My office has categorized my employment as a “professional” and not as a salaried employee. I want to know whether as a professional fee earner (they pay me a retainer fee) if I can use this deduction. If not, are there any other methods that I can claim a deduction under the IT Act as a professional fee earner. Can I make an application to the regional AO to grant a certificate for exemption of TDS or will I have to file and claim taxes at the end of the financial year.  Thanks.

  15. Paramjeet Singh says:

    Can an employer consider this education loan interest of an employee while calculating his / her salary Income Tax u/s 16. Thanks

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