Claim tax deduction on education loan
By Neelima Shankar
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Besides the tax deduction is only available if the purpose of loan is to pursue higher education i.e., full time studies in graduate or post graduate course.

Time period

The tax benefits on education loan are only valid once you start the repayment and moreover they are only available up to eight years. For instance if your loan tenure exceeds eight years, you cannot claim for deductions beyond eight years.

Hence it is better that the education loan is repaid within eight years. Unless if the loan amount is very high and it is difficult to afford a high amount of equated monthly installment (EMI), one should not opt for education loan with longer tenure.

Also a person can avail the benefits only if the loan is taken from a financial institution or a bank. Loan taken from relatives or friends will not be considered for tax benefits.


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(Comments Posted : 36) Post Your Comments
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Felipemob (Posted: Sep 22, 2017)
2. When I take education loan and opt for moratorium period and start servicing the loan after completion of my education, the EMI consists of three components - Current interest, part repayment of disbursed loan and part repayment of capitalized interest of moratorium period. What should be my deduction under sec 80E - whether it would be current interest and part repayment of capitalized interest of moratorium period? Please clarify.
RD (Posted: Mar 16, 2016)
3. I am the co applicant for the education loan of my doughter. I will be servicing the interest during the moratorium/study period. Can I claim tax exemption under 80E or any other clause for the amount I paid as interest till my son start repaying as EMI. Please help
R.K.Pani (Posted: Oct 28, 2015)
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