September 19, 2019

Deduction U/s 80E of Income Tax Act,1961

Interest on loan taken for Higher Education

Conditions for claiming deduction

  • Assessee is an individual
  • Assessee is taking loan from financial institution(i.e banking Company or financial institution notified by Central Govt.) or an approved charitable institution[i.e. an institution approved for the purpose of Section 10(23C) or 80G(2)(a)]
  • Loan taken for pursuing Higher Education of
    • Own or
    • Relative(Spouse, children of Individual or the student for whom the individual is the legal Guardian)

Higher Education means 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 any other authority recognized by Central Government or State Government.

Amount of deduction: Interest on such loan

Period of deduction : 

8 years(starting from the year in which assessee starts paying the interest) or
Till the year loan was repaid whichever is earlier