Section 80E: Tax Exemption on Interest on Education Loan
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

Section 80E: Tax Exemption on Interest on Education Loan

Section 80E: Tax Exemption on Interest on Education Loan
  • 28th Nov 2019 |
  • 4,868

The Indian education industry is expected to grow to USD 144 billion by 2020. Demographically, the country has one of the biggest youth populations combined with a large number of educational institutions.As the economy continues to grow and incomes increase, spending on education is also witnessing a boost. Education expenses account for the second-highest category in a middle-class Indian household.

Several people opt for education loans to fund studies and Section 80E of the Income Tax Act, 1961 helps you reduce your taxes when you opt for such a loan.

Section 80E of the Income Tax Act

According to this section, the interest paid during the financial year on the education loan is eligible for tax benefits. The income tax deduction under Section 80E may be claimed for education loan taken for self, spouse, children, and any students for whom you are a legal guardian.

The tax benefits under this section are available only on loans availed from a financial institution or a charitable trust. If you avail of a loan from your relative or friend and pay interest on the same, the 80E deduction benefits are not available.

Charitable institutions for this purpose include universities or educational institutes established for education purposes and are non-profit organizations. These may also include institutions or trusts, which are established for religious or charitable purposes, and are prescribed by the commissioner of Income Tax (Exemptions) or Director-General.

Deduction under Section 80E

Having understood what is Section 80E, you need to know that the benefits under are available only on the interest component and not on the principal amount on the Equated
Monthly Installment (EMI). You may claim such deductions from the first repayment date and continue using the benefits for seven more years. This means the 80E deduction limits are available for a total period of eight years.

The meaning of higher education as per Section 80E

The section defines higher education as studies pursuant to the completion of the Senior Secondary Examination or its equivalent. Moreover, the board or the university must be state or government approved. The course should be a full-time or a vocational program taken up after the completion of the Senior Secondary Examination. Interest paid on an education loan availed for pursuing an international course after completing Senior Secondary Examination is also eligible for benefits under this section.

Eligibility for tax deduction under Section 80E

  • To avail of tax benefits, you need to meet certain eligibility criteria as discussed below:
  • Only individuals may claim deductions; Hindu Undivided Families (HUFs) and companies cannot take benefit of this section
  • Only the interest paid on the loan is eligible
  • The deduction is available only for loans availed from recognized charitable or financial institutions to pursue higher education for a period of
    eight years from the first repayment year
  • The loan must be in your name; however, the course may be pursued either by you, your spouse, or children

The quantum of deduction under Section 80E

The section 80E income tax benefit is available only on the interest paid on the education loan. However, there is no upper limit on the amount that may be claimed during the eligible period. You need to procure a certificate from your lender to claim the deduction. It must clearly show the principal and the interest components within the EMI. The interest paid on the education loan must be through your income during the financial year.

The benefit is available for a period of eight assessment years under the assumption that the course would be complete and the loan would be repaid within this time. Often,education loans may provide moratorium of six months to one year post completion of the course. Therefore, repayment may commence only after the end of the moratorium period. In such cases, the benefits will be available from the assessment year when the first repayment is done and seven additional years.

Read Here for More Related Articles:

Download Brochure

Features

  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999

T&C

Browse our library of resources

Download Brochure

Features

  • Enhanced Protection Through Riders
  • Life Cover
  • Tax Savings
  • Multiple Premium Payment Terms
  • Guaranteed @ Loyalty Addion
  • Accrued Guaranteed @ Additions

Ref. No. KLI/22-23/E-BB/490

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Why is Form 16 Important?

Save Income Tax by 31st March: Here Is a Checklist

How to Check Income Tax Returns Status Onine?

What is the Difference Direct Tax and Indirect Tax

धारा 80सी आयकर अधिनियम, 1961

5 Popular Tax-Saving Schemes in India

How to File Income Tax Return without Form 16

What is HRA (House Rent Allowance) and How is HRA Exemption Calculated?

Received an Income Tax Notice? Your Guide to Understanding Intimations under Section 143 (1)

Role of Life Insurance in Your Financial Portfolio

How to save tax for salaried person?

Income Tax Deductions Under Section 80C

Are Financial Planning and Tax Planning the Same Thing?

All about TDS on Salary under Section 192 – Kotak Life

A Comprehensive Guide to Understand the ITR 7 Form

TDS Due Dates of FY 2020-21 For Return Filing

What is Form 16A?

Problems People Face with Tax Returns after a Job Change

Tax Saving for Self Employed in India

Penalty For Late Filing TDS Return

How to File Income Tax Return for First Time Tax Payers

When Should TDS be Deducted and Who is Liable to Deduct it?

Guaranteed Return Plans-Why is it a must for you?

Tax Benefits of ULIP Plans Available for NRIs

Sub-sections Under Section 80C of the Income Tax Act, 1961

Tax Benefits for Startups in India

Section 44AD of Income Tax Act for AY 2020-21

Income Tax Deductions for Disabled Person Under Section 80U

Tax-Savings Investments and Options in India

How can I get Form 16B from traces?

Section 16 of the Income Tax Act (ITA), 1961

How To Save Tax Better with 80C

All about Online Income Tax Calculator

What are the Different Types of Taxes in India?

Tax Saving Guide for 2019-20

How to file Form 16 online?

What To Do If Your TDS Is Not Deposited With The Government?

Financial Planning and Best investment options for Housewives

How to File ITR Online

How to Pay Advance Tax Online in India

Section 80G of the Income Tax Act

Tax-Free Income in India

What is Section 80C Deduction Limit?

52 Weeks Savings Plan: Daily Savings Plans for a Better Tomorrow

Income Tax Filing For NRI in India

9 Point Guide on how to File Income Tax Return Online

Tax Saving Options for Salaried Employees

How to File TDS Return?

Tax Benefit of Investing in Term Plan

How to Claim TDS Refund for Excess TDS Deduction?

Budget 2019: Impact on the Common Man in India

What is Salary Protection Insurance and Why You Need It

5 Unusual Investments You Didn't Know for Saving Taxes in India

What is the Percentage of Tax Deducted at Source (TDS)?

Difference between Section 80C and 80CCC of the Income Tax Act, 1961

Home Investment Plan to Buy Dream Home

Tax Exemption and Scope of Coverage

9 Income Tax Myths That Could Cost You Money while Filing returns

What Investment Options Come with Tax Incentives?

Tax Structure in India

Difference Between Gross Income & Total Income in Calculating Income Tax

What is the Last ITR Filing Date and Penalty for Late Filing of ITR?

What is Section 80CCC of the Income Tax Act 1961

What is ITR & How to File Income Tax Return

ITR-6: Guide to filing ITR-6 Form online

Do Beneficiaries Pay Taxes on Life Insurance?

What are the Tax Benefits of Sukanya Samriddhi Yojana (SSY)?

Why Tax Planning Should Be an All-year Round Activity

What is Tax Evasion and What Are The Penalties For Tax Evasion In India?

How to View 26AS and Download Form 26AS Online?

Types of Riders in Insurance Policy

What Is Advance Tax and How Is It Calculated?

Income Tax Filing Using Multiple Form 16

What is Challan 280? How to Pay your Income Tax Online with Challan 280?

What is Tax Deduction at Source (TDS)?

Union Budget Highlights – 1st February 2022

How to Save Tax on Salary Arrears?

What is Section 80C - Explained in Detail

What is TDS Refund Process?

Can You Get Term Insurance Without Income Proof?

Types of Income Tax Return (ITR) Forms

Income Tax Exemption for Disabled

What is TDS Exemption Limit?

What is ITR 5 Form and How to File ITR 5?

Difference between Section 80C, 80CCC, 80CCD & 80D

Financial Benefits and Government Schemes Every Woman in India Should Know

Tax Planning and Tax Benefits of Life Insurance

Tips to plan your savings in 2019

How To Save Tax Using Life Insurance?

How to View 26AS and Download Form 26AS Online

Everything You Need to Know About Tax Benefits of National Pension Scheme (NPS)

How to Download Form 16?

How to e-Verify your Income Tax Return

What is TDS Slab?

Pradhan Mantri Suraksha Bima Yojana

Impact of GST on Life Insurance in India

What is Form 16B?

ITR 2 Form – Complete Guide

7 Important Things to Remember While Investing in a Savings Investment Plan

Why January Is an Important Month for Saving Tax?

Form 16, Form 16A, and Form 16B?

How to File Form 10E for Tax Relief on Salary Arrears?

What is Section 195 of the Income Tax Act? TDS on Non-Residents of India

LTC Cash Voucher Scheme October 2020 – Everything You Need to Know

A Guide to Life Insurance Policy’s Tax Benefits and Taxability

What is Section 10D of the Income Tax Act?

All You Need to Know About Section 80C

Have You Considered Term Insurance a Part of Your Tax Planning?

How to File Income Tax Return - Everything You Need To Know

How do I Calculate My Term Insurance Premium

What is Form 26AS - All You Need To Know

What is the Difference between Form 16 and Form 16A?

Income Tax Exemption for Physically Handicapped Dependent

How to Get Form 16?

Investment Proofs You Need Submit To Lower TDS Cut From Your Salary

Section 10 (10d) of Income Tax Act, 1961 on Payouts of Life Insurance Policy

A Complete Guide for Filing ITR 3 Form

Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB for FY 2020-21 & 2021-22

Income Tax Deduction Under Section 80CCC In India

How to Check Income Tax Refund Status Online in India

Income Tax Slabs and Rates in India for FY 2021-22/AY 2022-23

Top 8 Tax-Saving Methods in India- Budget Planning

Saving Income tax in 2017 - 18

Insurance and Endowment: Everything You Need to Know!

What is the TDS Rate on Salary?

Tax Deductions You MUST Know

How to Save Income Tax with Insurance

Things to Do After Filing Income Tax Returns

Presumptive Taxation for Business and Profession

Investing Lump Sum Amount

ITR 1: Sahaj Form

How to File Form 16 for Salaried Employees?

Tax Saving Tips: Best Ways to Save Income Tax for 2021

E-Filing of Income Tax Returns in India

How to e file ITR on Income Tax Government Portal

Income Tax Benefits for Doctors

All about TDS Payment Online & Due Dates

Tax Season Is Coming- Know How to Save Tax

Tax Saving Options other than Section 80C

Interest Imposed Under Section 234A, 234B and 234C

How to Check Income Tax Refund Status Online in India

Section 80D - Medical and Health Insurance Tax Benefits Under Section 80D

What is Section 80C Deduction?

9 Tax Changes in Budget 2019 that may Impact Your Personal Financial Planning

Guide for Tax Calculation on your Salary

Section 80C Deductions as per Income Tax Act, 1961

Understanding Tax Exemptions in ULIP (Old and New)

धारा 80डी आयकर अधिनियम, 1961

What are Direct Taxes? How to Avoid being Overtaxed?

आयकर स्लैब 2021-2022

List of Important Income Tax FAQs

How Much Money This Budget 2019 Can Help You Save