Section 80E : Deduction for Interest on Education Loan

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Hiral Vakil

Chapter VI-A
Interest
Section 80E

Section 80E allows a deduction for interest paid on repayment of education loan taken for higher education. However, a taxpayer can not claim a deduction on principal repayment. You can claim this income tax deduction while filing your ITR.

Deduction under section 80E is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime
Tip
Deduction under section 80E is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime

Who is Eligible to Claim Deduction for Education Loan Under Section 80E?

Only individuals are eligible to claim deduction under section 80E. Additionally, this deduction can be claimed even if a loan is taken to pursue higher studies outside India. HUF or company or partnership firm can not claim deduction under this section. Following are the additional conditions to claim the deduction:

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What is the Education Loan Deduction Limit Under Section 80E?

There is no monetary limit u/s 80E. An individual can claim the total interest amount paid as a deduction. However, a deduction is available only for 8 consecutive years. For example, Arjun has taken an education loan for his higher education in FY 2016-17. He has repaid the loan in 3 years then he can claim a deduction for 3 years only.

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Have questions before filing your ITR?
Don't worry, our tax experts can help you with all your tax related queries!
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ITR Form Applicable for Section 80E

The taxpayer can claim deduction under section 80E while filing ITR if all the above-mentioned conditions are full-filled. Individuals/HUFs can claim 80E in any of the ITR forms, i.e, ITR 1ITR 2ITR 3, and ITR 4 depending upon their income sources. The due date for filing ITR is 31st July of the next FY if the tax audit is not applicable.

For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 30th November 2020 for all taxpayer.
Tip
For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 30th November 2020 for all taxpayer.

Supporting Documents

The only document that is required in this case apart from the common documents such as Form 16, PAN, etc, is a certificate from your bank or financial institution or approved charitable institution from whom such an education loan has been taken.

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Learn more about the deductions that can be claimed on certain expenses
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FAQs

Can I claim deduction u/s 80E for an education loan taken from relative or friend?

No. In case you have borrowed money from a relative or a friend, you would not be able to claim deduction under this section.

Can I claim deduction u/s 80E if my father has paid the loan?

No, you can not claim deduction u/s 80E. However, your father can claim a deduction u/s 80E. Because relative includes children of an individual.

What does higher education mean under section 80E?

Higher education includes all the fields of study pursued after passing the senior secondary examination or its equivalent exam. It includes vocational as well as regular courses.

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