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Section 80E: Deduction for education loan

Section 80E of the Income Tax Act allows you to avail of tax deductions for loans taken out for higher education. Section 80E covers the deduction on the “interest component” paid on higher education loan from notified financial or charitable institution.

Eligibility for Tax Deduction under Section 80E:

Only individuals are eligible for tax deductions.

Hindu undivided families (HUF) and companies cannot avail deductions under this section.

The benefit can be claimed by the parent as well as the child, which means that the person who pays the education loan whether parent or child can start claiming this deduction.

Deductions under Section 80E:

Section 80E deduction can be availed only for a maximum period of 8 years. This means, you are allowed to avail this benefit in 8 years or until the interest is paid in full (whichever is earlier).

There is no upper limit for availing the deduction under Section 80E. So, you are allowed to claim the entire interest amount.

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.

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Note: This Post was last updated on January 23, 2023

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