YOUR EDUCATION LOAN CAN ALSO SAVE YOUR TAX

YOUR EDUCATION LOAN CAN ALSO SAVE YOUR TAX

If you have taken any education loan for the higher studies, you can save your tax. This deduction is allowed under section 80e of income tax act, 1961.

Section 80e provides deduction to an individual- Assessee in respect of nay interest on loan paid by him in the previous year out of his income chargeable to tax.

The loan must have been taken for the purpose of pursuing his higher education or for the purpose of higher education of his or her relative i.e. spouse or children.

Higher education means full time studies for any graduate or post graduate course in engineering, medicine, management or for post-graduate course in applied science or pure sciences including mathematics and statistics.

This education is allowed for computing the total income in respect of the initial assessment year ( i.e. the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan) and the seven assessment year immediately succeeding the initial year or until the interest paid in full by the assessee, whichever is earlier.

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