Section I: Income Tax and Your Career

• Ques: Interest on higher education loan is fully deductible
• Ans: Key points:
  • Under section 80E, you can claim deduction if you have paid interest, out of your income chargeable to tax, on the loan taken for your higher education or your relative’s (spouse or children) higher education.
  • What is higher education?: Higher education means full-time studies for a graduate or post-graduate course in engineering, medicine, management; or for post-graduate course in applied sciences, or pure sciences, including mathematics and statistics.
  • Which loans qualify for deduction?: The loan should be taken for your higher studies from any financial institution or approved charitable institution. Personal loans from individuals, relatives, friends, are not eligible for this deduction.
  • You can claim this deduction for interest up to eight years from the start of the assessment year when you started repaying your education loan.
  • There is no limit on the interest amount on which deduction is allowed for education loan.