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
I have taken education loan from a financial organization (Prodigy Finance) registered in UK ( Outside India) to pursue MBA from outside India. Am I eligible to avail tax exemptions?
I had taken education loan from Govt bank in f.year 2014-15 for higher education in abroad for my son. Can I claim for tution fees . Education loan repayment will be start from June-206=16. Can I claim interest on education loan in my income tax return.
Sir,
I am Prabhat and a passed out student from BE but I have a bank loan (education loàn ) ànd I am not pay the amount of loan in instalment.
Sir if I pay one time full princple amount of loan then the bank can be relif the loan interest and only take principle amount…
400000 rupees loan amount.
If any rules or procedure for relief the bank loan interest so please give me advise……
Sir..
My brother availed an educational loan fr 81000 in year 2008…in 2015 financial year he paid sumtyms and after that he totally paid d remaining amount and pre closed the loan. Now my query is he paid 199500 in 2015..but principle is 81000. So d difference is 118000. Cn he avail this as interest exemption fr 2015…plz reply sir..bcz no one is telling clearly…thanks dir
Hello Sir,
Education Loan is taken under my Dad’s name and I am paying installments for it ,Can I claim the Tax Exception under 80E?
Dear Sir,
An education loan has been taken for higher studies of my Son in which my son and husband are co-borrower. The interests are being paid through an account which is jointly managed by me and my husband. My husband is ready to give declaration that he wouldn’t claim for rebate on interest of education loan from Income Tax Deptt. Pl. let me know whether being mother, not co-borrower but interest payer, I can claim rebate on interest on education loan or not?
Dear Sir,
I took look Education loan for my elders Brothers MBA
Am I eligible for deduction of Interest on the loan.
Please reply at the earliest.
Thanks
If the interest is debited in previous years but repaid during this year, whether such amount is eligible for exemption under 80E?
Example:
Interest debited in the year 2012-13: Rs.20,000
2013-14: Rs.22,000
2014-15: Rs.25,000
2015-16: Rs.27,000
Repaid during the year 2015-16: Rs.94,000.00
Is the entire amount of Rs.94,000/- is eligible for exemption under 80E for the financial year 2015-16?
Sir,
My Education loan interest amt Rs.240000/-dis year plz tell me i deduction under 80E full amount rs.240000/-
Tell me Sir Education Loan Interest Limit under 80E
Is IT exemption under 80E is available if we take higher education loan for pursuing masters (MS)in USA
Sir, this is P PRASANTH
I took a loan for Rs.2,30,000 from SBI hyderabad towards Education loan for my 03 years B.Tech Graduation from year(2010-2013).
I have to know about how much i would get the interest for that amount and from when should i have to pay as i am an unemployed guy and also about the total interest with the amount.
Government have a plan to wave 50% of principal amount. So wait for government order
I am taking a Loan of Rs.10 Lakhs for the higher education of my daughter from SBI, but the product under which the loan was taken is “LAMP (Loan Against Mortgage Property) . Whether I am eligible for 80E exemption for the interest paid for the said loan.
sir i got education loan in 2008( b.ed) amount 30000(BANK OF BARODA). i paid amount 28000 after announced interest subsidy.now they given notice to pay amount 35000.
please reply what i have to do? i am unemployee.
central government given subsidy then why i have to pay?
Me and my son are co-applicants for an education loan taken for son’s higher studies. I paid the EMIs for 4 years and availed tax benefit. Now my son is employed and making payment of EMI from his salary. Is he eligible for tax rebate for remaining period?
I want to take demand loan against my fixed deposits from commercial bank, Can I claim income tax rebate on the interest paid on this demand loan if bank gives interest certificate for the amount of interest serviced by me
I TAKEN EDUCATION LOAN (MY CHILD HIGHER EDUCATION )FROM SBI RS.320000.00 IN THE RATE 14.45% F.Y.2014-15
TOTAL REPAYMENT RS.97200.00 REPAYMENT TOWARDS PRINCIPAL RS.74554.00 & REPAYMENT TOWARDS INTERST RS.22645.00 UNDER SANCTION 80E PRINCIPAL + INTERST ARE ELIGIBLE FOR ABOVE FINANCIAL YEAR.
Regards,
K.L.VANPARIA,
Sir/Madam
I have taken education loan from my Company Kindly let me know whether the TAX BENEDFIT under Sect 80 E is available to me.
The co shall charge repayment first and then interest is this is also eligible for tax benefit?
Hello,
Sir if the Brother has taken loan for his Brother than deduction is allowed or not.
Hello sir,
I had taken an educational loan back in 2007 for Rs. 175,000. While starting repayment of loan in EMI from august 2011, but My father paid all interest amount accrued earlier. Form which year I can get tax exemption under sec 80E And for how many years i can claim exemption. please reply soon…
Dear Sir, my parents availed of an education loan against property for my BROTHER. He has paid some instalments but has now flatly refused to pay anymore. He is gainfully employed overseas. Now, it has fallen upon me to pay monthly instalments of 43,806 rupees to save the property from being confiscated by the bank. Kindly advise a way whereby I can avail of tax rebate.
I mean is thrre a way to somehow petition the Income Tax department or submit some affidavit and acquire guadianship for my 35 year old brother. Thanks a lot in advance.
Sir,i take education loan in 2008-12 on my own name and now bank person apply rate of interest also within the whole period when i take loan but actually 1st they say no interest will be applied on money till the education completed and m not eligible for paying interest of money ,what should i do for relaxion of interest on money….plz reply and my frnd also relaxation in interest from 2009-13 but my loan bank bank of baroda is not providing relaxation and not give full information about what should i do ?? plz rply
email id- ruhelaprakhar775@gmail.com
Hello,
I couldn’t declare my Education loan interest amount for FY 14-15 investment plan. Now, during filing IT Returns, my payable Tax shows very high.
Is there any way, where I can declare or cover those Eductation Loan interest paid during FY 14-15?
Note – This is first time I am going for IT returns filing during my 4.7 years of profession career. Therefore , I have never declared my Education Loan Interest Amount for my IT investment. Can I cover those in this current year IT returns?
Hi All ,
I took education loan for the year of 2007-2011. Can i know the plr rate syndicate bank for the year of 2007.
hello sir…. my problem is i had education loan for mba.. in 2011. and the amount 135000… so i ask to u how can some deducted amount will be in this time.. because i paid 4000 rs per month paying in sbi loan account.. if i will showing the pan card in that branch.. so can will possible some amount giving me decrease.. and please rply me in my mail id.. my mail id is dangwalsudhirdangwal@gmail.com
Sir,
I am Ranjitha.I take loan of 140000 for M.E in the year 2014-2016.is there any interest want to pay in the studying period or after the completion of education?
I had availed education loan of 25 lakes from Canara bank for my sons higher studies in U.S.A. By making an F.D of Rs. 30 lakes as I had no assists in my name to pledge to bank. The loan had to be paid with 11.50% interest in 180 EMI of Rs.39,280=00′ margin is at 19.96% .being a govt., servent can I avail rebate under 80 E.
Hey!!
I have just completed my Graduation and for which I had taken an education loan of 4.20 lakhs @13.75 interest, in the year 2012, kindly guide me if the subsidy will be applicable in my case or not, will i have to pay the interest??
For Section 80E Educational loan tax claim
1) Educational loan was held jointly with my father and Meis it eligible to apply under this section?
2) My Educational loan period is 2008-2012 Can i claim it 1st time on this year ?
3) What are the list of document to be submitted from my side for the claim?
I took a loan of 145000 in the year 2012-13 for my education.Now i have completed my course and even paid the outstanding amount to the bank.The bank authorities are willing to give me a interest certificate pertaining to this year but they are not giving any certificate that stating that i have paid the entire interest this year itself.Am i eligible for tax deduction under the interest which i have paid this year even though this belong to other year for educational loan
MY NAME IS REHAN,
FORM UDUPI, KARNATAKA
SIR,
I TAKE 4 YEARS EDUCATION LOAN FOR BE- DEGREE EDUCATION IN CANARA BANK
AMOUNT: 2.5 LAKH, FROM 2006-TO 2010.
TILL NOW I PAID 4.30 LAKH,
NOW OUTSTANDING BALANCE TO BE PAID IS 2.65 LAKH
BUT THE GOVERMENT ANNOUNCED TO CANCEL THE INTEREST RATE. BUT TILL NOW I PAID ALL INTEREST.
SO PLEASE HELP ME SOON AND LETR ME KNOW HOW TO RESOLVE
WHETHER IN CASE OF LESS INCOME OR LOSS IN BUSINESS THE UNABSORBED AMOUNT OF INTEREST WILL BE ALLOWED TO BE CARRIED FORWARD TO NEXT YEAR?
Hi Sir,
I had taken education loan of 3.5 lacs at floating rate of interest. My repayment has been started from this month and EMI is of Rs. 12751/ month for the duration of 57 months from now onwards. In case if i deposit an amount of say Rs. 60,000 in next EMI then will it reduce my loan amount as well as the rate of interest or the bank will only deduct the EMI amount i.e. Rs. 12751 from 60,000 ? Please let me know.
Thanks,
Vishal
Thanks
@Vidhi
Just read your Loan Agreement and act accordingly
Sir,i take education loan on mu own name and now bank person apply rate of interest also within the whole period when i take loan but actually 1st they say no interest will be applied on money till the education completed and m not eligible for paying interest of money ,what should i do for relaxion of interest on money….plz reply
Sir,i take education loan on mu own name and now bank person apply rate of interest also within the whole period when i take loan but actually 1st they say no interest will be applied on money till the education completed and m not eligible for paying interest of
MY NAME IS JOHNVICTOR,
FORM KANYAKUMARI DIST, TAMILNADU
SIR,
I TAKE 4 YEARS EDUCATION LOAN FOR BE- DEGREE EDUCATION IN SBI BANK
AMOUNT: 2.8 LAKH, FROM 2007-TO 2011.
TILL NOW I PAID 2.9 LAKH,
NOW BALANCE ALSO 2.85 LAKH
BUT THE GOVERMENT ANNOUNCED TO CANCEL THE INTEREST RATE. BUT TILL NOW I PAID ALL INTEREST. IAM FIRST GRAGUATE ALSO,
SO PLEASE HELP ME
08867264271,
ITZJOHNVICTOR@GMAIL.COM
@Darshna
Benefit of 80E availble only on payment basis. Not accumalation basis, Whole of ur payments towards interes will eligible for 80E
For any querry :
Email: bhatirawal@yahoo.co.in [not the com.]
WhatsappMsz: 8963013175 [Do not call on write ur qurrey]
@Dear Madhusree
Your father may claim 80E
As per 80E: person paid sum on Loan taken by him for his or his relative edu.
In ur case ur father taken loan he pay for ur edu.
@Dear ashok Modi ji
Please tell what kind of benefit you want to avail?
Do you want to claim benefit on the ground of mortgage your property?
80E gives benifit for payment towards Interest to person who pays such.
Further parents of ur daughter in law may get benefit in the loan taken from authorised Financial institution and for authorised unviresity
@Mr.Shalin sharma
Benefit of 80E can avail only if such university is recognised by central Govt.
@Mr. sahebgouda
Yes you can claim deduction u/s 80E . Towards your Interest payment (not against principal amount) for maximum seven year .
Since your sister is your relative by virtue of sec 80E (3)(e).
@Miss Asha
Yes you can claim deduction u/s 80E . Towards your Interest payment (not against principal amount) for maximum seven year
Hi, I had taken education loan of Rs 1,70,000 to pursue my engineering in the year 2010 with 11.5% interest. With interest its Rs 2,60,000 now. I need to repay it from May 2015. And loan was taken in my name itself. Can I claim benefit under 80E or any other section to get some reimbursement.
Sir,
My sister has taken loan for MBA from SBI. Bank has asked to me sign as co-borrower to her loan. after completing studies sister paid some 30K, recently i paid 1 lakh as interest. can i claim tax relief as she is dependent or i am her legal guardian as my father is no more.
Hi,
I am an employee of Indian railways.
I want to apply for education loan for abroad studies for my sibbling, so in that case do i need to show some asset against the loan?
And will it be covered under tax deduction ?
Sir,
If the Loan is taken in the name of Children (Major / Minor) but the interest and/or principal is being paid by Father then who will be eligible for Deduction U/Sec 80E ?
Regards