Tax Concession on Education Loan

Tax Concession on Education Loan  Section 80E of the Income Tax Act, 1961 provides for a deduction to an assessee (being an individual), out of his income chargeable to tax, on account of any amount paid by him in the previous year by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursing his higher education or for the purpose of higher education of his relative.

Under the earlier provisions, the deduction was available only for pursuing full time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics. The provisions of the aforesaid section 80E were amended vide the Finance (No. 2) Act, 2009 by substitution clause ( c ) of sub-section (3) so as to extend its scope to cover all fields of studies (including vocational studies) 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.

P.S. This information was given by the Minister of State for Finance, Shri S.S. Palanimanickam in written reply to a question in the Rajya Sabha on 28-3-2011.

Courtesy : Shri Rahul Ratunawar (via: Face book. Thanks Rahul)