In this article, we will discuss the Deduction under Section 80E in respect of repayment of loan taken for higher education.
Write short note: Deduction u/s 80E
Deduction under Section 80E [In respect of repayment of loan taken for higher education]
The salient features of this section are discussed as follows:
Who can claim this deduction:
This deduction is available only to an individual assessee. However, if such assessee exercises option under section 115BAC, deduction under this section shall not be available.
Specified conditions:
This deduction is available when the following conditions are fulfilled :
| Condition-1 | The individual has taken a loan from any financial institution or any approved charitable institution [approved for the purpose of section 10(23C) or 80G(2)(a)] for the purpose of pursuing his higher education or for the purpose of higher education of his relation (relative means the spouse and children of the individual or the student for whom the individual is the legal guardian). |
| Condition-2 | The individual pays interest on such loan in the previous year. |
| Condition-3 | The individual pays such interest out of his income chargeable to tax. |
Amount of deduction: Actual amount of interest on loan paid during the previous year shall be allowed as deduction.
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Period for which deduction is available: This deduction is available for a period of 8 assessment years starting from the assessment year relevant to the previous year in which the assessee starts paying the interest on loan or for a period until the interest is paid in full, whichever is earlier.
- Higher education-meaning of: ‘Higher education’ means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school., board or university recognized by the Local authority or State Government or Central Government or by any other authority authorized by the local authority or State Government or Central Government to do so.
- Higher education-where to be pursued: For claiming deduction under this section, there is no condition that higher education should be in India only [Nitin Shantilal Muthiyan vs. Dy. CIT (2015) 59 taxman.com 416 (Pune-Trib.)]
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