Do you want to succeed in life?

  • You must be thinking what a lame question it is.
  • Who doesn’t want a better job, good pay & much more?
  • As the wise one’s have said “study & work hard if you want to achieve heights”.
  • This thirst to achieve more, makes us want to study hard & get admission into our dreams colleges.
  • You may want to do MBA from IIM,s or M Tech from MIT, the list is endless.
  • But not all of us are Tata or Ambani kids with endless monetary resources.
  • It is a well known fact that, higher education cost in a country’s or world’s top schools run into double figure of lacs.
  • What to do then? Shall you stop pursuing those dreams? NO!!
  • There is a happy news if you too want to get higher education.
  • Government has provided Sec 80E which gives deduction for interest on education loan.

What is Sec 80E?

Sec 80E provides that, if you have taken any loan to pursue higher education. Then you can claim deduction of the interest amount that you have repaid to the bank.

But like every time, our income tax department, does not provide relief “without any ifs & buts”.

Who can claim deduction u/s 80E?

  • The benefit of this section can only be claimed if you are an individual assessee.
  • For e.g. Ram, Mohan, Sohan etc are individual therefore they can claim this benefit.
  • Ram Pvt Ltd, is not an individual, therefore they can’t claim this benefit.

For what purpose loan should be taken?

  • Only loans taken for pursuing higher education (including vocational studies) are eligible for deduction u/s 80E.
  • You can take this loan either for yourself or your wife or children or for student of whom you are a legal guardian.

To avail benefit u/s 80E, from where the loan should be availed?

If you want to claim benefit of 80E, then loan must be taken from:

  • any financial institution, or
  • any approved charitable institution.

What is the amount of deduction u/s 80E?

  • This is the best part as there is no maximum or minimum deduction amount specified.
  • This means, any amount of interest paid by you on education loan can be taken as deduction under this section.

What is the period of deduction u/s 80E?

  • Here is a little catch! Even if there is no max deduction amount, there is a limit on period this deduction can be taken.
  • This deduction is allowed: EARLIER of
For 8 A.Y’s starting from the assessment year you start paying interest on loan. When interest is fully paid before completion 8 A.Y’s.

Deduction u/s 80E also for Foreign Education

  • If you thought that benefit is available only when you pursue higher education in India.
  • Then you couldn’t be more wrong.
  • Even if you want to go outside India for higher education, interest paid on that loan is also allowed as deduction u/s 80E.

Our Thoughts

  • There are lot of opportunities out there for everyone of us.
  • Now the onus lies on how we utilize those opportunities for our benefit.
  • A country’s future entirely depend upon it’s coming generation & our government realizes as well acknowledges that fact.
  • Hence the result of that realization is in the form of deductions like Sec 80E.
  • At Tax2Win, it our never ending effort to simplify any of your tax problem. Still if you need any kind of assistance to your tax issue, get in touch with our eCAs.
  • Also, now you can file your income tax return online from the comfort of your home for FREE! Simply visit our website and file your ITR today. Happy Filing

Sec 80E at a Glance

Sec 80E at a Glance

Frequently Asked Questions

Q- Can you claim deduction of 80c under 44ADA?

Yes, you can claim deduction under 80C even if return is filed under 44ADA.

Q- Does the Provident Fund come under section 80C of tax exemption?

Yes, investment made under provident funds comes under 80C

Q- Do recurring deposits come under section 80C of tax deduction?

No, recurring deposits does not come under 80C of the act however, fixed deposits comes under 80C.

Q- How do I save income tax under 80 C and how much maximum?

The maximum amount which can be saved through 80C is INR 15 lakhs.

Q- Is Section 80C eligible if we are filing taxes under 44AD?

Yes, deductions under 80C is allowed for those who are filing returns under presumptive income.

Q- Is term insurance exempted under 80C or 80D?

Term insurance can be availed under section 80C and 80D both.

Q- Does investing in NPS comes under section 80c?

Yes, investment in NPS comes under 80C and can be claimed under 80CCD also.

Q- How can we save income tax beyond 1.5 lacs as I have already invested in PPF, LIC, NPS?

You can claim deduction under 80D for any medical insurance paid upto INR 25000 in case of normal citizens. Moreover, if you take care of disable person you can claim a deduction under section 80DD upto INR 75000

CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.