Have you taken an education loan to support higher studies of yourself or of your spouse, Children or for the student of whom you are legal guardian and you are not aware of the Income Tax deduction under Section 80E that you are entitled to. Then here is a guide that will assist you to know Income Tax deduction under Section 80E on education loans. These benefits help you to reduce the overall cost of your education loan.
The deduction under section 80E for Interest on educational loan is available to an individual if following conditions are satisfied:
1. Who is eligible for Section 80E Deduction for educational loan
Section 80E Deduction for educational loan available only to Individual not to HUF or other type of Assessee.
2. Deduction amount under Section 80E
The amount of interest paid is eligible for deduction and moreover there is no cap on the amount to be deducted. You can deduct the entire interest amount from your taxable income. However there is no benefit available on the 3
3. Deduction under Section 80E available on Payment of Interest
Section 80E Deduction available if Interest is been paid during the previous year and was paid out of income chargeable to tax which means if repayment is made from income not chargeable to tax than deduction will not available. Deduction will be allowed only when actual interest is paid.
Note: – Earlier to previous year 2006-07 the Section 80E deduction was available only for Interest on loan taken and repaid by the assessee for his own studies.
4. Interest on educational loan should have been paid on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education. Interest on Loan taken from relatives or friends will not be eligible for deduction under section 80E.
(a) “approved charitable institution” means an institution established for charitable purposes and approved by the prescribed authority section 10(23C), or an institution referred to in section 80G(2)(a);
(b) “financial institution” means a banking company to which the Banking Regulation Act, 1949 applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(c) “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;
5. Educational Loan should have been taken for the purpose of pursuing higher studies of Individual , Spouse, Children of Individual or of the student of whom individual is legal Guardian. . Hence parents are also eligible to claim deduction of interest paid by them on loan taken for their children’s education.
Income tax department has added (W.e.f. A.Y. 2010-11) additional fields of studies (including vocational studies) pursued after passing the Senior Secondary Examination or its equivalent from any school, Board or University recognised by the Central or State Government will also be covered under deduction in respect of interest paid on loan taken for higher education.
Definition of Higher education is substituted by making a amendment as per Finance (No. 2) Bill 2009. After the amendment Higher education would means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or local authority or by any other authority authorised by the Central Government or State Government or local authority to do.
So Higher studies include all the fields of study pursued after passing the senior secondary examination or its equivalent exam. It includes both the Vocational courses as well as the regular courses.
6. Interest on educational loan should have been paid for the loan taken for the purpose of pursuing his higher education or of the spouse and children. From A.Y. 2010-11 Relative also includes student for whom the individual is the legal guardian.
7. Deduction period of Section 80E Deduction: – Deduction shall be allowed in computing the total income in respect of 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.
The tax benefits on education loan are only valid once you start the repayment and moreover they are only available up to eight years. For instance if your loan tenure exceeds eight years, you cannot claim for deductions beyond eight years. Further if entire payments are done in 5 years only, then tax deduction will be allowed for 5 years and not 8 years.
Hence it is better that the education loan is repaid within eight years. Unless if the loan amount is very high and it is difficult to afford a high amount of equated monthly installment (EMI), one should not opt for education loan with longer tenure.
*Initial assessment year means the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan.
8. Education Loan should be in the name of Individual: – Deductions on education loan can only be claimed if the loan has been taken in your own name. If your parents, spouse or sibling has taken the loan for your studies, then you are not entitled to get tax benefit.
9. The loan includes not only tuition or college fees but also other incidental expenses for pursuing such studies like hostel charges, transport charges etc.
10. Repayments of education loan NOT covered under Section 80C.
11. There is no condition that the course should be in India.
12. Document required to Claim Deduction under Section 80E– You need to obtain a certificate from your Bank / financial institution or approved charitable institution from whom such education loan is been taken.Such certificate should segregate the principal and interest portion of the education loan paid by you during the financial year. The total interest paid will be allowed as deduction. No Tax benefit is allowed for the principal repayment.
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(republished with amendments )
Author Bio
Thanks
Sir.
If education loan taken by father of student and can tax benefits claims by elder Brother of studen.
Hello Sir,
WE HAVE TAKEN EDUCATION LOAN (ABROAD) FOR OUR DAUGHTER IN LAW ON HER NAME. WE HAVE MORTAGED OUR HOME FOR THE SAME.
THE INTEREST OF LOAN IS PAID EVERY MONTH BY HER PARENTS AS PER OUR MITUAL AGREEMENT.
NOW MY QUESTION IS THAT CAN WE TAKE BENEFIT U/S 80E IN OUR INCOME RETURN?
PL. GUIDE US.
THANKS,
ASHOK K. MODI
NAVSARI
Sir, interest Loan taken for Higher studies in out side India is eligible for deduction u/s 80E ?
Sir, interest Loan taken for Higher studies in out side India is eligible for deduction u/s 80E
sir,
My father took education loan for my higher studies when i was minor.Now i am major.My education gets completed next year.My father paid some amount every month as interest and principle amount.I am going to be married after two years.Up to my marraige and after my marraige also my father will pay principle amount and interest amount every month.Who are eligible for claiming the deduction of tax benefit on education loan,My father or Myself?
Sir,
I have taken Education loan amounting to Rs 7,50,000/- what about tax benefits in favour of my self w.e.f 01/04/2014 to till date
Hi… I have taken loan of rupees 80000 from syndicate bank in the year 2008-09. Now it overdues of rupees 130000 including interest. How can apply for the interest deduction to bank? Can i eligible for the rule 80e?
Please clarify: “Deduction available if Interest is been paid during the previous year and was paid out of income chargeable to tax which means if repayment is made from income not chargeable to tax than deduction will not available. Deduction will be allowed only when actual interest is paid”
I accumulated Rs 1.5 lakh as interest during my education (July 2012-Mar 2014). And after my graduation, I accumulated Rs 1 lakh as interest (Apr 2014-Jan 2015). The amount I have paid against my interest is Rs 2.3 lakh. I started repaying from my salary, since July 2015. So, do I get tax exemption for the interest accumulated till date, or do I get exempted only for the interest accumulated in this financial year? Please clarify. Thanks
Krishnamoorthy S/ Trichirappalli/ amavasai_krish@yahoo.co.in
I will be 1st co applicant (co-borrower) for my sons higher edu loan with CrediLa for about 50 lacs or so (full amount). As per CrediLa I am solely responsible although my son will the student & signing the doc as student. My house doc & other doc shall be surety. Can I claim ded. u/s 80E.
Thanks & Regards
Krishnamoorthy S
Sir i hv taken. Loan for d education of frankfinn institue of airhostess training. Loan amount is 101000.n d loan ws taken on 2007 ..n till nw i hv paid 74500. N hv nt been placed in any co by my institute . N i m jobless … i gv tutions at home ..nw i getting married..n nw i m nt able to pay my loan ii u pls suggest me hw cn i rebate my total int …plz rply me soon
Dear sir,
I have took my education loan amount of 250000 from union bank of india in 2006 ,from that till now i have paid 221659 as interest but not regularly .but still i have to pay 276000 ,in that amount 16000 is interest,so the principle amount is 260000 ,i have planning to get agriculture loan to close the educational loan because the interest amount is too high in ED loan.So can i have the option to pay only the principal amount of 260000 except the interest amount of 16000 .currently i am not in a job,so please let me know what i have to do
does we have to pay interest for education loan if the whole amount is paid just after finishing the course in India?
I have taken education loan for my son(I AM CO BORROWER)I am paying interest for that and availed tax rebate benefits. Now my son got job in USA. shall I am entitle to pay LOAN and avail rebate on it after employment of my SON.
Hello Sir,
I have taken a loan from one of the govt. bank and till today i am paying the principal amt.as well as interest.And also claiming deduction of interest.
But from current FY i am receiving interest subsidy so i want to know whether that subsidy should be added to my income ???
Thanks in advance.
Sagar Rajde
i have taken an education loan from obc is there any procedure to reduce my intrest because still now i am not able to give my intrest before i am not getting an job.
Hi sir,
I had taken education loan(2008 – 2012 ) for my B.Tech from iob bank in tamilnadu.. I got totally around 2 lakh.. i aaplied for interest reduction with income certificate,bio data ,notary public certificate through Bank manager …but I don’t know interest reduce or not.. I want know about whether government announced or not regarding education loan interest reduction.. because some of the bank sc
olding very bad for repay the loan..
I have taken Education loan for higher studies of my daughter (MS from USA) from my company ( a Govt of india public Enterprises). As per loan condition I have to pay first entire principal amount and then interest amount although the interest accrual is being intimated by company on monthly basis.
Am I eligible for benefit under section 80 E?
if yes, can I claim benefit on the basis of accrual of interest or I have to wait till start of payment of interest.
Thanks
I have taken loan of Rs 14 lac from SBI to pursue higher studies. I was the only applicant of the loan. My husband was the guarantor. After completing studies I joined job and was paying the EMI till now and getting tax benfit. But now I am again going for further studies and my husband will be repaying the loan EMI. Should he get any tax Benefit on the interest he will be paying? In case he is not been able to claim for tax benefit as Guarantor. Then can he be joined as a Co-Applicant of the loan along with me now?
Sir,
My wife had taken education loan. The loan is sanctioned on her name. after marriage i am repaying the loan. Can I claim deduction of interest paid by me on her behalf in the tax return?
Thanks,
My name is Mrs Kathrine Lisa, i am from Chicago USA, married, i have been searching for a genuine loan company for the past 3 months and all i got was bunch of scams who made me to trust them and at the end of the day, they took my money without giving anything in return, all my hope was lost, i got confused and frustrated, i find it very difficult to feed my family, i never wanted to have anything to do with loan companies on net, so went to borrow some money from a friend, i told him all that happened and he said he can help me, that he knows a loan company that can help me, that he just got a loan from them, he directed me on how to apply for the loan, i did as he told me, i applied, i never believed but i tried and to my greatest surprise i got the loan within 24 hours, i could not believe, i am happy and rich again and i am thanking God that such loan companies like this still exist upon this scams all over the places, please i advise everyone out there who are in need of loan to go for { juliansmithsloan2014@gmail.com } they will never fail, your life shall change as mine did.
After B.E., my son has served for 4 years in an MNC. Now he gets admission for 2 years PGP at IIM-B. Total Fee payable is 17.00 Lakhs + other Expenses. Our queries are –
1. Myself & my Wife have paid Ist term Tution Fee (2014-15) of our Son for the above course from our income chargeable to tax. Similarly, we both shall be paying Ist Installment of Tution Fee of our Son during second Year 2015-16 from our savings.
(Question) Can we both (myself & my wife) get rebate u/s 80-C of IT Act towards Payment of Tution Fee for both the F.Ys.
2. For remaining amount of Tution Fees & other expenses (for 2014-15 & 2015-16), my Son intends to borrow Education Loan from Bank in his name and myself & my wife – being the Co-Borrowers. After completion of PGP, he may get job.
(Question) : In case we three (my son, myself & my wife) collectively repay the Education Loan from our Savings jointly or individually in equal proportion or otherwise from our income chargeable to tax, in that case can all of us ( i.e. my son, myself & my wife ) will be eligible to claim IT Rebate on interest paid during each F.Y.in the ratio & proportion each of us pays, so as to share the burden.
Your valuable advice is solicited, so as to apply for Loan accordingly.
Thanks & Regards
Satish Kumar Sappal
After B.E., my son has served for 4 years in an MNC. Now he gets admission for 2 years PGP at IIM-B. Total Fee payable is 17.00 Lakhs + other Expenses. Our queries are –
1. Myself & my Wife have paid Ist term Tution Fee (2014-15) of our Son for the above course from our income chargeable to tax. Similarly, we both shall be paying Ist Installment of Tution Fee of our Son during second Year 2015-16 from our savings.
(Question) Can we both (myself & my wife) get rebate u/s 80-C of IT Act towards Payment of Tution Fee for both the F.Ys.
2. For remaining amount of Tution Fees & other expenses (for 2014-15 & 2015-16), my Son intends to borrow Education Loan from Bank in his name and myself & my wife – being the Co-Borrowers. After completion of PGP, he may get job.
(Question) : In case we three (my son, myself & my wife) collectively repay the Education Loan from our Savings jointly or individually in equal proportion or otherwise from our income chargeable to tax, in that case can all of us ( i.e. my son, myself & my wife ) will be eligible to claim IT Rebate on interest paid during each F.Y. in the ratio/proportion of its repayment and jointly share the repayment burden.
Your valuable advice is solicited, so as to apply for Loan accordingly.
Thanks & Regards
Satish Kumar Sappal
i had taken 3,50,000 rs edu loan i hv2 repay from aug2014
is ther any deduction under ths sec??????
WE (Self & Spouse) want to take education loan for our son for MBA course aboard.
Can we both claim Tax deduction on its interest part (i.e.50% each)?
(Because our both income has to be calculated for edu. Loan.)
Need your advise
Dear Sir i have taken the education loan for completing the BE from SBI in 2009 total amount 2 lakhs.In 2012 i ahve completed by BE but i ahve not satisfied with the job and with the present job it is not possible to pay the interest can you please help me regarding interest or is there any procedure to extend because i need one year again to get the proper salary after that i can paid the interest currently i am getting very frusted because of there call.
Sir,
I had taken education loan. The loan is sanctioned in my name. Now I am married and I am a housewife. My spouse is repaying the loan. Can he claim deduction of interest paid by him on my behalf in the tax return?
Respected sir,
(1) what are the document should i collect from employer who is claiming exemption in interest on education loan, and life insurance policy.
(2) can a person eligible for exemption in both two policy? if he invested in two life insurance policy of his own.
Hi
I work for a private company. Can you please let me know if I am eligible for tax benefits under 80E for the educational loan taken for my brother?
I have taken Rs.15 lakhs education loan for my son for pursung MS in USA from SBH, Hyderabad and I am co-applicant for the loan, I am a central govt., Group ‘C’ servant and I applied for rebate under IT (interest)duly submitting the interest statement issued by SBH.
My concerned person in my office has rejected the statement and stating that no rebate will be given and deducted the tax for the year 2013-14 without giving the rebate.
Kindly do the needful please, if I am eligible for exemption / rebate, please advise me how to get back my IT amount and its procedure.
One of our empployee is claiming rebate for interest on higher education loan taken by her for her son. At present the son is working and not dependent on her. Can she claim the rebate under section 80E for repayment of interest.
Sir
What proof I have to be submitted with ITR for getting tax benefit for interest on my education loan?? Pls reply
dear sir/madam,
i carried out my phd with the aid of education loan (Rs. 1,40,000/=)…..now i got job…recently (october 2013) i repaid my education loan in one time settlement (Lok Adalat)…i paid 1,60,000 rupees (principal=1,40,000 + interest = 20000)…interest paid can be claimed for exemption through section 80E..i have a question on whether i am eligible to claim exemption to the amount paid for principal…i paid it from my source of income only which is taxable….this amount has never been claimed for tax exemption neither by me nor by anyone else….kindly help me in this regard….
By
P. vijayan
I have availed an edu loan of Rs.15 lacs @ 9.5% p.a.from my employer ( Govt of India PSU)for my son’s Higher Education (MS in USA). The DDO says that Deduction under sec 80E in respect of payment of Interest is not allowed since the PSU is neither an approved charitable institution nor a Financial Institution. What shd I do now.
i take education loan aug.2010 to may 2013 of Rs.180000/- then if i paid Rs.40000/- amount as interest paid for whole amount. can i claim for the Rs.40000/- as tax exemption against education loan paid in financial year 2013-14.
also is there any criteria to consider education loan interest paid in particular financial year or initial whole 3 year interest may paid in grace period.
I have taken an education loan for my son to study MS in US.Now, I am paying intrest every month to the bank. My pay disbursing official refusing to take in to consider the intrest to give tax exception at source.
Is it correct? please clarify wether iam eligible to get the benefit at source itself
My son took a loan for persuing MBA in Canada from Ontario State ie OSAP Ontario student Assistance programme.He paid interest on education loan to the Ontario state govt. on the bank rates in dollars. If he is eligible for income tax rebate on interest paid under section 80 E for that loan.Let me know .
I have taken a education loan from SBI for Rs. 20.00 lacs for the education of my son. As per terms of the loan the interest is to be repaid as and when debited by the bank. The principal amount is to repaid from the 3rd year onwards. The loan is taken for post graduate couse in United States. I have paid the interest on monthly basis during 2012-13. Am I elegible for deduction U/s 80E.
Sir,
I had taken educational loan to pursue my B.E(2008 to 2012). I have completed my studies and I am currently working. Total amount including interest was 2,37,000. I have started paying money of 20,000 from this month. So that I will complete my loan amount within 1year.Whether I will get my interest amount in the next year itself??If so,what is the procedure for claiming the interest amount?? Please clarify… Thanking you in advance. Waiting for your reply.
Regards,
M Nagulan.
Sir,
I had taken educational loan to pursue my B.E(2008 to 2012). I have completed my studies and I am currently working. Total amount including interest was 2,37,000. I have started paying money of 20,000 from this month. So that I will complete my loan amount within 1year.Whether I will get my interest amount in the next year itself??If so,what is the procedure for claiming the interest amount?? Please clarify… Thanking you in advance. Waiting for your reply.
Regards,
M Nagulan.
DEAR SIR,
I HAVE TAKEN EDUCATION LOAN FROM SBI IN 2009 TO 2013 FOR MBA .THE TOTAL EDUCATION LOAN WAS 430000 RS.AND I AM PAYING EMI FOR LAST 18 MONTH.CAN I CLAIM AS A INTEREST EXCEPTION .
I have started the repayment of education loan of my son. The EMI repays the principal as well as the interest. Is rebate allowed on the interest component
Hi Sir,
I have taken loan for Pursuing MBA. Please let me know whether my wife can claim interest paid on Education loan, if she will be paying Bank Installment.
Thanks,
Hi Sir,
I have taken loan of 5 Lacs for pursuing MBA. Please let me know whether my wife can claim interest paid on Education loan if she will pay the Bank Installment. Thle loan is in my name.
Thanks,
Dear sir, Education loan of Rs. 20,00000.00 (twenty lakhs’) has been availed on my son’s name on 01-02-2010 and he is the main applicant for his higher education at Australia . My self and my mrs both are co- applicants for his loan .To avail this loan the property of my mrs has been pledged. My son do not had any self income while availing loan. Since I am paying regular interest for his loan from my salary income for the last three years. Since Feb 2013 EMI has been started. His education has been completed on 31-03-2013 . Still he has not employed. But still i am paying his EMI from my salary income. Please clarify I can claim interest amount under section 80E. If it is eligible still how may years I can claim interest. Mean time if he employed in any of company in Abroad in that case can i claim interest under section 80E under my income. Please clarify. Thanking you sir.
hi sir,I got education loan from sbi 2006,loan amount about 60000,my expenditure only 39000,my course was over.I paid interest for one year.after data I joined pg course.NW they catch our account about 1 lakh.wat s the remedy for dis?.any GO for interest deduction? please guide me
Sir, I have taken Edu.Loan from SBI . Not paying any interest by me to bank till date. Bank debited interest in loan account . I want to know about tax relief for accrued interest debit by Bank in my loan account.
Dear sir .
I have taken education loan for MBA (Pune University)of Rs.252000/- from SBI in dad’s name as guardian in this year.
I am paying interest for the above loan.
Whether Dad Can claim deduction under section 80E for the interest actually paid by him.
Please clarify.
Regards
TUSHAR S VYAS
I have taken Rs.3,62,000 loan from IDBI bank for doing MBA.My father is paying Rs.4,200 every month.shall i get amy tax exception?
I have taken education loan for the 3 years Bachelor’s degree after +2 for my daughter from syndicate bank which was disbursed on 5 jan 2012(first installment).
Tenure of loan is 7 years, repayment of loan will start after course period + 1 year or six months after getting job whichever is earlier. But the bank has written in sanction letter that the interest during the moratorium period shall be served on the monthly basis.I am paying the interest to the bank monthly. Am i eligible for deduction of this interest paid during the financial year 2012-13 as per income tax law?