DEDUCTION OF INTEREST ON EDUCATION LOAN SECTION 80E FOR AY 2019-20

SECTION-80E INTEREST ON EDUCATION LOAN

  • Only Individual can claim Deduction for the payment of Interest on Education Loan paid during the year. The loan should be taken for higher education in India or outside India. A Higher Studies includes all type of studies pursued after passing the senior secondary examination or its equivalent exam. Both regular courses as well as vocational course is the part of higher studies.  
  • The loan for higher education includes the tuition fees, lodging and boarding charges, study material charges, computer or laptop charges if necessary for course.

Eligible Person for Claim:

The loan is taken for higher education of following individual:

  • Self.
  • Spouse
  • Children
  • Any student for whom the individual is legal guardian.

Eligible Institution for loan:

The following institutions are eligible for providing the higher education loan:

  • Bank
  • Financial Institution
  • Approved Charitable Institutions

Individual cannot taken the loan from friends or relatives for claiming the deduction in this section.

Eligible Deduction Amount:

  • Total Interest paid during the year can claim for deduction.
  • There is no limit to claim the deduction of interest amount paid during the year.
  • Certificate of interest paid from bank or financial institution is required to claim the deduction.
  • No deduction is allowed for principal repayment.

Eligible Period for deduction:

  • It is available for 8 years maximum.
  • A individual can claim the interest on loan starts from the year in which you starts the repaying the loan.
  • If the complete repayment of the loan is finished in less than 8 years then deduction will be allowed for less than 8 years.
  • A person is always advisable to take the loan for 8 years.
  • The interest should be paid out of the income of the assessee earned during the year.

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