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Essential conditions for claiming deduction under section 80E of income tax act, 1961 for Interest on Education Loans:

This deduction under section 80E for for Interest on Education Loans is over and above the Rs 1,50,000 deduction allowed under section 80C of Income Tax Act, 1961.

1 Who Can Claim deduction under section 80E ONLY Individuals Not available to HUF or any other person
2 The purpose of the loan To pursue higher studies in India or outside India  –
3 From where the loan should be taken From Any Bank / financial institution or any approved charitable institutions Loans taken from friends or relatives and loan taken from any financial institution outside India don’t qualify for the deduction under section 80E
4 Meaning of Higher studies It includes both the Vocational courses as well as the regular courses pursued after passing the senior secondary examination or its equivalent exam.
5 Deduction allowed if loan taken for Higher education of self, spouse or children or the student for whom the individual is a legal guardian Loan taken for siblings (brother / sister) or other relatives (in-laws, nephew, niece, etc.) would not qualify for section 80E benefit.
6 Deduction Amount Total interest paid during the financial year.

No limit on the maximum amount of deduction under section 80E

No Tax benefit is allowed for the principal repayment
7 Period of Deduction: It is available from the year in which individual starts paying interest on loan and in 7 succeeding years. Deduction is allowed for maximum period of 8 years or until the interest is repaid in full, whichever is earlier.

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    Sir I had taken higher education loan of 8 lakh in 2017 and there was 4 years moratorium on repayment …in 2021-22 I repaid the the whole loan amount of 8 lakh plus total accrued interest of 155950.. now loan account stands closed.. can I claim 80e exemption on 155950 which includes interest of current year plus that of previous years…

  2. Apoorv Gupta says:

    Is the Loan processing fee also considered as Interest for education loan here ?

    Ref. As loan processing fee for home loan is considered for deduction similar to interest.

  3. kuladeep says:

    Sir if father takes education loan (loan account – father) for higher education of son. Son is repaying education loan. then if father is not claiming deduction u/s 80 e ,can son claim 80 e deduction

  4. Sourav25 says:

    If the education loan is taken for education of son for medical coaching then will the interest on loan for paying the coaching fee will also be eligible for deduction u/s 80E?

  5. Mohammad Jamal says:

    Taken medical insurance for self and spouse from HDFC ERGO for 2 years period combined and a total premium of about Rs 35000/- is paid at a time. Can the amount be divided into 2 parts equally and claimed in two financial years for accessment purpose.

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April 2024