Quick Summary of Tax Deduction U/S 80E for Education Loan

Pursuing higher education, particularly in professional courses like MBA, Medicine, Engineering, and others would be expensive. A rise in inflation in the sector makes it much more expensive year after year. Thus it becomes harder for parents in the middle or lower-earning groups, to give the fees for abroad education loans for their children until they get a scholarship.

When there is no scholarship or enough investments incurred for the goal, there is only one choice left for the parents to borrow money from others and fund the education of their children.

With respect to other loans, the loan for the purpose of education is cheaper indeed the borrowers might get discounts and gives subsidiary on the interest rates, and furnishes greater tax advantages on the repayments u/s 80E of the Income Tax Act.

Defining the provisions u/s 80E and the way that an individual could get the benefit of the same, tax expert mentioned that “Section 80E of the Income Tax Act Act allows education loan borrowers to claim interest paid on education loans as a deduction. The deduction, however, is allowed only on the interest component of the loan and not the principal amount of the loan.”

How to Claim Tax Benefit on Education Loan?

An education loan taken by a parent for the higher education of a child in India or abroad may be deducted from their income. They are able to save tax on their total income as a result. Additionally, this benefit is available in addition to the Section 80C deduction of Rs 1.5 lakh. A tax expert said the deduction can be claimed up to eight years after the loan has been repaid or when it ends.

Tax Experts Mentioned the Measures Which Would be Chosen to Claim the Deduction

Your bank provides you the tax certificate with the amount you paid as interest on the education loan in a fiscal year.

During ITR filing, mention the interest amount specified in your certificate.

When you are a salaried person tell the same to the HR department of your company within time so that lower TDS would get deducted from your pay. When the TDS would get deducted, you are enabled to apply for the refund during tax return filing. The owners of the business must convey their CA within the stipulated time.