<\/strong><\/p>\n

\n

\n
• \u00b7        
  \nWho can
  \nclaim deduction under section 80E?<\/strong><\/li>\n<\/ul>\n

  Only
  \nan Individual can claim deduction under this section.<\/p>\n

  \n

  \n
  • \u00b7        
    \nWhich
    \nkind of expenditure is eligible for deduction under section 80E?<\/strong><\/li>\n<\/ul>\n

    If
    \nloan is taken by an Individual for any study (i.e., any study after passing
    \nsenior secondary examination or its equivalent) from bank, financial
    \ninstitution or an approved charitable institution, the amount of interest is
    \ndeductible in the year in which the interest is paid.<\/p>\n

     \u201cFinancial Institution\u201d means a banking company to which the Banking
    \nRegulation Act, 1949 applies or any other financial institution which the
    \nCentral Government may, by notification in the Official Gazette, specify in this
    \nbehalf<\/p>\n

    \n

    \n
    • \u00b7        
      \nFor whose
      \neducation the loan should be taken?<\/strong><\/li>\n<\/ul>\n

      Interest
      \nis deductible if loan is taken for Individual\u2019s own education or for the
      \neducation of his spouse, children or any student for whom the individual is the
      \nlegal guardian.<\/p>\n

      \n

      \n
      • \u00b7        
        \nWhat is maximum
        \nlimit of deduction?<\/strong><\/li>\n<\/ul>\n

        Entire
        \ninterest is deductible in the year in which the taxpayer starts paying interest
        \non loan and subsequent seven years or until interest is paid in full. In other
        \nwords, if the loan is repaid within four years, the deduction can be claimed for
        \nsuch period only. However, interest should be paid out of income chargeable to
        \ntax. <\/p>\n

        \n

        \n
        • \u00b7        
          \nWhether
          \nthe deduction is also available for principal part of loan along with interest?<\/strong><\/li>\n<\/ul>\n

          No.
          \nThe deduction under section 80E is available only in respect of interest part,
          \nand principal part is not allowed for deduction under section 80E.<\/p>\n

          \n

          \n
          • \u00b7        
            \nCan
            \nanyone take deduction under section 80E, if the loan is taken for the purpose
            \nof higher education of his brother or sister?<\/strong><\/li>\n<\/ul>\n

            No.
            \nAs it is clearly stated that, interest is deductible only if the loan is taken
            \nfor Individual\u2019s own education or for the education of his spouse, children or
            \nany student for whom the individual is the legal guardian, no deduction is
            \navailable in respect of interest on loan taken for the purpose of higher education
            \nof his brother or sister.<\/p>\n

            \n

            \n
            • \u00b7        
              \nIn whose
              \nname the loan should be taken in order to claim deduction under section 80E?<\/strong><\/li>\n<\/ul>\n

              It
              \nis the most important thing to remember that the loan should be taken in the
              \nname of Individual, who is going to claim deduction in respect payment of
              \ninterest on that loan.<\/p>\n

               <\/p>\n

              \n

              \n
              • \u00b7        
                \nCan an
                \nIndividual claim deduction, if the loan is taken for study in abroad?<\/strong><\/li>\n<\/ul>\n

                Yes.
                \nThis deduction is allowed even if the loan is taken for study in abroad.<\/p>\n

                \n

                \n
                • \u00b7        
                  \nWhether
                  \nthe deduction is available, if the loan is taken from employer?<\/strong><\/li>\n<\/ul>\n

                  No. Deduction
                  \nunder section 80E is available only when the loan is taken from bank, financial
                  \ninstitution or an approved charitable institution. Hence, no deduction under
                  \nthis section is available if loan is taken from employer of taxpayer. The deduction
                  \nis also not available if the loan is taken from his family or friends.  <\/p>\n

                  \n

                  \n
                  • \u00b7        
                    \nImportant
                    \npoint to note:<\/strong><\/li>\n<\/ul>\n

                    There
                    \nis also no maximum limit for rate of interest on loan taken. Thus, a taxpayer
                    \ncan save maximum tax by way of deduction, if the rate of interest is high.<\/p>\n","protected":false},"excerpt":{"rendered":"

                      \u00b7         Which kind of expenditure is eligible for deduction under section 80E? If loan is taken by an Individual for any study (i.e., any study after passing senior secondary examination or its equivalent) from bank, financial institution or an approved charitable institution, the amount of interest is deductible in the year in which the … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4],"tags":[66],"class_list":["post-98","post","type-post","status-publish","format-standard","hentry","category-income-tax","tag-loan"],"yoast_head":"\n