Tax Finance Info: Education Loan

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Section 80E: Interest Deduction on Education Loan</h3>
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<u><span lang="EN-US" style="font-size: 14.0pt; line-height: 115%; mso-bidi-font-family: "Times New Roman";"><b>Introduction
about Section 80E:-</b><o:p></o:p></span></u></div>
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<span lang="EN-US" style="line-height: 115%; mso-bidi-font-size: 12.0pt;">It is the charging section
of interest on education loan taken by an individual for his or for his spouse
or for his children’s higher studies. An individual can claim for deduction u/s
80E of the income tax act 1961 out of his total income chargeable to tax. An
assessee is eligible to deduct the interest amount of education loan which is
only taken for higher education. The benefit of deduction helps the asseessee
in reducing the overall cost of the education loan.<o:p></o:p></span><br />
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<span style="font-size: 16pt;">Income
  Tax E-filing Return<o:p></o:p></span></div>
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<span style="font-size: 16pt;">Process
  of Filing Rectification Return<o:p></o:p></span></div>
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<span style="font-size: 16pt;">Common
  Errors in Filing Rectification Return<o:p></o:p></span></div>
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<span style="font-size: 16pt;">Common
  Mistakes in E-filling of Income Tax Return (ITR)<o:p></o:p></span></div>
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<u><span lang="EN-US" style="font-size: 14.0pt; line-height: 115%; mso-bidi-font-family: "Times New Roman";"><b>Conditions
for taking the benefit of deductions u/s 80E:-</b><o:p></o:p></span></u></div>
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<span lang="EN-US">                The following situations must be
fulfilled by the assessee if he/she wants to take the benefit of deductions :<o:p></o:p></span></div>
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<span lang="EN-US"><span style="font-size: 7pt;">                   
</span>I.<span style="font-size: 7pt;">           
</span></span><span lang="EN-US">Such deduction is only claimed by
an individual. HUF & other types of assessee are not eligible to claim the
deduction.<o:p></o:p></span></div>
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<span lang="EN-US"><span style="font-size: 7pt;">                 
</span>II.<span style="font-size: 7pt;">           
</span></span><span lang="EN-US">Interest on such educational
loan is paid by assessee in the previous year. It is also necessary for an assessee
that interest on such loan is paid from his total income income chargeable to
tax.<o:p></o:p></span></div>
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<span lang="EN-US"><span style="font-size: 7pt;">               
</span>III.<span style="font-size: 7pt;">           
</span></span><span lang="EN-US">The main purpose of loan taken
is for higher education, whether it is for an individual or for his spouse or
for his children. If an assessee adopts any child and the loan is taken for
his/her higher education, then the interest on it is eligible to deduct by an
assessee.<o:p></o:p></span></div>
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<span lang="EN-US">a.<span style="font-size: 7pt;">      
</span></span><span lang="EN-US">Here “Higher Education“ means
the Education after passing the higher secondary examinations i.e. for graduate
or post graduate courses from any board or university or any other local
authority authorized by the state government or central government. If the
course is for minimum 2 years, then the interest on loan taken for that course
would be eligible to deduct.<o:p></o:p></span></div>
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<span lang="EN-US"><span style="font-size: 7pt;">               
</span>IV.<span style="font-size: 7pt;">           
</span></span><span lang="EN-US">There is only interest amount
is deductible by the assessee. He/she can not claim deduction for the principal
amount of the loan.<o:p></o:p></span></div>
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<span lang="EN-US"><span style="font-size: 7pt;">                 
</span>V.<span style="font-size: 7pt;">           
</span></span><span lang="EN-US">Such benefit is available to
the assessee only when, the loan is taken from any financial institutions or
any approved charitable institutions. The loan taken from the relatives or
friends is not be eligible for deduction u/s 80E.<o:p></o:p></span></div>
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<span lang="EN-US">a.<span style="font-size: 7pt;">      
</span></span><span lang="EN-US">Here financial institutions
mean any bank or any banking company or any banking institutions established
under section 51 of the banking regulation act, 1949. Other financial
institutions are also eligible if it is notified by the central government in
the official gazette.<o:p></o:p></span></div>
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<span lang="EN-US">b.<span style="font-size: 7pt;">     
</span></span><span lang="EN-US">Approved charitable institution
means any institutions approved under section 10 (23c) or an institution which
is referred in section 80G and also it is established for charitable purpose.<o:p></o:p></span></div>
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<span lang="EN-US"><span style="font-size: 7pt;">               
</span>VI.<span style="font-size: 7pt;">           
</span></span><span lang="EN-US">The deduction is available from
the year in which the payment is made till the end of such payment or seven
succeeding assessment years whichever is earlier.<o:p></o:p></span></div>
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<span lang="EN-US"><span style="font-size: 7pt;">             
</span>VII.<span style="font-size: 7pt;">           
</span></span><span lang="EN-US">If the loan is taken from
outside India and interest is also paid outside India still such deduction is
available to the assessee.<o:p></o:p></span></div>
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<span lang="EN-US"><span style="font-size: 7pt;">           
</span>VIII.<span style="font-size: 7pt;">           
</span></span><span lang="EN-US">The benefit of deduction on
education loan is available only when the loan is taken in the name of assessee.
If your parents or your spouse has taken a loan for your studies then you are
not eligible to deduct its interest from your total taxable income.</span></div>
</div>

Section 80E: Interest Deduction on Eduction Loan

Section 80E: Interest Deduction on Education Loan Introduction about Section 80E:- It is the charging section of interest on educ...

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