Section 80E – Deduction i.r.o. Interest on Higher Education Loan: IT Circular 20/2015

Section 80E – Deduction i.r.o. Interest on Higher Education Loan: IT Circular 20/2015

5.5.8 Deduction in respect of interest on loan taken for higher education (Section 80E)

This chapter is the part of 5.5 DEDUCTIONS UNDER CHAPTER VI-A OF THE ACT [Click to view] of IT Circular 20/2015

Other Chapters

5.5.6 Deductions
in respect of expenditure on persons or dependants with disability

5.5.7. Deduction
in respect of medical treatment, etc. (Section 80DDB)

5.5.8 Deduction in respect of interest on loan taken for higher education (Section 80E):

Section 80E allows deduction in respect of payment of interest on loan taken from any financial institution or any approved charitable institution for higher education for the purpose of pursuing his higher education or for the purpose of higher education of his spouse or his children or the student for     whom he is the legal guardian.

The deduction shall be allowed in computing the total income for the Financial year in which the employee starts paying the interest on the loan taken and immediately succeeding seven Financial years or until the Financial year in which the interest is paid in full by the employee, whichever is earlier.

For the purpose of this section –

(a) “approved charitable institution” means an institution established for charitable purposes and approved by the prescribed authority section 10(23C), or an institution referred to in section 80G(2)(a);

(b) “financial institution” means a banking company to which the Banking Regulation Act, 1949 applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;

(c) “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;