Deduction 80E A. Y 2021-22
According to income Tax Act 1961 there is a provision for deduction for entire amount of interest paid on a loan taken for pursuing higher education (Section 80E)
Essential conditions for claiming deduction under this section:
- The deduction is available only to individual assessee.
- The individual must have taken a loan from:
- Any financial institution, ior
- Any approved charitable institution.
- The loan must have been taken for pursuing higher education. Such education must be of assessee himself or any of his relatives
- The deduction shall be allowed only in respect of any sum paid by him, in the previous year by way of interest on such loan
- Such amount should be paid out his income chargeable to tax
Quantum of deduction: The amount paid during previous year towards interest
Period of deduction: Deduction shall be allowed for eight assessment years starting from the assessment year in which the assessee starts paying the interest on loan, or until the interest theron is paid by the assessee in full, whichever is earlier
Meaning of higher education:
“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.
Deduction under section 80E is available to individual assessee who has taken loan for self higher study after 10+2 .