Income Tax Benefit for higher education loan
According to provision of section 80 E of Income Tax Act,1961. Any individual who avail education loan for higher education and paid interest on it can claim deduction on it. This deduction is separate from Rs.1,50,000 under section 80C .
Only an individual can claim this deduction. It is not available to HUF or any other kind of taxpayer. The loan should be taken for the higher education of self, spouse or children or for a student for whom the individual is a legal guardian. Parents can easily claim this deduction for the loan taken for the higher studies of their children.
The deduction for the interest on loan starts from the year in which such individual start repaying the loan. It is available only for 8 years starting from the year in which you start repaying the loan or until the interest is fully repaid whichever is earlier. This means if the complete repayment of the loan is done.