An education loan can not only fund your higher studies but also help save tax. The interest paid on the education loan can be claimed as deduction, as per Section 80E of the Income Tax Act of India, 1961.
Some Other Important Points Related to Income Tax Deductions Under Section 80E:
Section 80E of the Income Tax Act, 1961 relates to deduction for the repayment of Interest on Education Loan. Customers of HDFC Credila can avail Income Tax Deduction on interest paid on Education Loan taken from HDFC Credila. Either student or parent can claim this tax benefit. This enables families to reduce the overall cost of Education Loan. The tax deduction under section 80E is available to an individual if following conditions are satisfied:
Deduction amount: The repayment of Interest paid on Education Loan is eligible for deduction and moreover there is no cap on the amount to be deducted. The entire interest amount can be deducted from the taxable income.
Interest should have been paid on loan taken by student from eligible financial institution only
"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 Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so. Education Loan should have been taken for the purpose of pursuing higher studies of Individual, Spouse, Children of Individual or of the student of whom individual is legal Guardian.
Hence parents are also eligible to claim deduction of interest paid by them on loan taken for their children’s education.
This Deduction is allowed for courses pursued in India as well as for courses pursued outside India.
The above information is to provide you with just the basic understanding only. Please consult your tax advisor for specific tax related advice. HDFC Credila does NOT take any responsibility related to individual's tax matters.
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