• There is no upper limit to the amount that can be availed as deduction from taxable income for interest paid on the education loan. In short the entire interest amount is eligible for deduction from taxable income.
• The principal amount of the education loan is not eligible for any deduction from taxable income.
• The income tax benefit availed under Section 80E for interest paid on an education loan is independent of the amount availed under Section 80C of the Income Tax Act. In short this means the interest amount deduction that can be claimed under Section 80E is separate and the INR 1,00,000 deduction that can be claimed under Section 80C is separate. Both the benefits can be availed independent of each other.
• The interest benefit on an education loan is available for a total of maximum 8 years.
• The person availing the tax benefit need not compulsorily take the loan for him self to avail the tax benefit. The tax benefit can be availed for education loan taken for self, spouse or children. If the person has taken an educational loan for spouse, then the person himself can only claim tax benefit for the interest on the loan and not the spouse.
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