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Friday, February 14, 2014

Tax Savings Tips under Section 80E - Higher Education Loan Interest

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Tax Savings - Higher Education Loan Interest

The interest paid on loan taken for pursuing higher education of self or any dependant is exempted from tax under section 80E. An education loan can be taken for wife, children and minors for whom you are the legal guardian. This deduction is applicable for a period of 8 years or till the interest is paid, whichever is earlier.

The deduction is only approved for higher studies, which means full time graduate or postgraduate courses in engineering, management or applied sciences, pure sciences including mathematics or statistics. However, from 2011 onwards, the scope of this exemption has been extended to cover all fields of studies including vocational studies pursued after completing the Senior Secondary examination or equivalent. No exemption is applicable for part time courses.

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