5 months ago mycaguruKeymaster
Section 80E Income Tax Act, 1961 (Brief Overview)
Section 80E Income Tax Act, 1961 (Brief Overview): 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.