Section 80E – Deduction for Interest on Education Loan
25 June 2015
DEDUCTION IN RESPECT OF PAYMENT OF INTEREST ON LOAN TAKEN FOR HIGHER EDUCATION –[SEC.80E]
If is loan taken by an individual for any study (i.e., any study after passing senior secondary examination or its equivalent) from a bank, financial institution or an approved charitable institution, interest is deductible in the year in which interest is paid.
Interest is deductible if loan is taken for pursuing taxpayer’s own education or for the education of his relatives (i.e., spouse, children or any student for whom the individual is the legal guardian).
Maximum monetary ceiling –Entire interest is deductible in the year in which the taxpayer starts paying interest on loan and subsequent 7 years or until interest is paid in full. However, interest should be paid out of income chargeable to tax.