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Last updated on: July 29, 2025
Section 80E of the Income Tax Act, 1961, provides a tax deduction on the interest paid towards education loans in India. This benefit is available to individual taxpayers who have taken loans for higher education for themselves, their spouse, or children from recognized financial institutions or charitable organizations. The deduction is available only on the interest component—not the principal—without any upper limit on the amount, for a maximum of 8 consecutive years starting from the year the repayment begins or until the interest is fully paid, whichever occurs first. Section 80E helps reduce the tax burden for those financing higher education, making quality education more accessible. To claim the deduction, proper documentation such as interest certificates from the lender is required during income tax filing.
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Read BioEducation is one of the most important investments you can make for your future, but it often comes with significant expenses. The Indian government understands these challenges and offers tax reliefs to support higher learning. Section 80E of the Income Tax Act is a well-known provision that allows Indian taxpayers to claim a deduction on the interest paid on education loans, making higher education more affordable. This guide gives a clear, detailed, and up-to-date overview of Section 80E benefits, limitations, procedures, and relevant examples as of 2025.
Section 80E is a popular income tax exemption that helps individuals reduce their tax liability when repaying education loans. If you or your family have taken a loan for higher studies, you can claim deductions for the interest portion of the EMI.
Section 80E allows you to claim a deduction on the interest paid on an education loan for yourself, your spouse, children, or for a student for whom you are a legal guardian. It does not cover principal repayment, only interest.
The deduction can be claimed for up to 8 consecutive years starting from the year you begin repaying the loan, or until the interest is fully paid, whichever is earlier. This provision is crucial for students planning studies in India and abroad in 2025, helping to ease financial stress during repayment years.
Expert Insight: Many young professionals are not aware that Section 80E can be claimed even if the education loan is taken for a spouse or dependent child, making it valuable for families supporting multiple learners.
Higher education includes any course, degree, or full-time study pursued after passing the Senior Secondary Examination (Class 12 or equivalent). This covers graduate, postgraduate, vocational, and professional courses in India or overseas. There is no restriction on the field of study.
Section 80E offers clarity and practical tax relief as you plan or repay your education loan in India.
Section 80C allows deductions for tuition fees, but not education loan interest. Section 80E and 80C can be availed simultaneously, helping you claim maximum relief on both expenses and interest.
Did you know? You cannot double claim for the same amount under both sections but can claim both for different payments related to your education.
No, there is no upper limit set for the deduction on interest paid under Section 80E. The entire interest amount paid in the financial year can be claimed.
Understanding both advantages and limitations will help you plan your taxes and loan repayments effectively.
People also ask:
Q. Can I claim Section 80E if I take a loan from my employer or a friend?
A. No, only loans from approved financial institutions, banks, or NBFCs are eligible.
Expert tip: Always keep records handy for verification in case of an audit. This will ensure smooth processing of your claim and prevent delays.
Only Indian residents can claim Section 80E deduction. However, you can take a loan for overseas studies but must be a resident taxpayer.
First hand experience: Sanjay, a working professional in Hyderabad, took an education loan of Rs. 10 lakhs in 2021 for his daughter’s undergraduate engineering studies in Singapore. The family spent about Rs. 95,000 as annual interest in 2024. During ITR filing in 2025, Sanjay claimed the full interest paid as deduction under Section 80E, saving nearly Rs. 28,500 in annual income tax for that year.
This provision is best suited for:
If the full loan is repaid before 8 years, deduction under Section 80E only continues for those years during which the loan is active and interest is paid.
| Feature | Section 80E | Section 80C | Section 10(14) Children’s Education Allowance |
|---|---|---|---|
| Covers Interest or Principal | Interest only | Principal (tuition fees) | NA |
| Maximum Limit | No Limit | Rs 1.5 lakh/year | Rs 1200/annum per child |
| Who Can Claim | Individual | Individual/HUF | Salaried employees |
| Tenure | 8 years | Every financial year | Every financial year |
| For which Expenses | Higher education loan | School/college fees for children | School/college fees |
Did you know? Most working parents can combine all these sections for children’s schooling and higher education by careful tax planning.
Yes, as long as the course qualifies as higher education and the loan is from a recognized financial institution in India or NBFC registered under RBI, you are eligible for the deduction.
Yes, it applies to any course pursued after Class 12, including vocational courses, provided the loan is for full-time study.
Only the individual who makes the repayments and in whose name the loan is taken can claim the deduction.
Online financial marketplaces now offer comparison tools where you can check education loan interest rates, processing fees, tenure, and eligibility from leading banks and NBFCs in one place. This helps you choose a lender that not only gives you attractive terms but also maximises your tax benefit under Section 80E.
Popular platforms let you filter loans by study destination, collateral requirements, and repayment periods, so you can make an informed choice about both your education financing and tax planning goals.
Expert Insight: Comparing products online can fetch you lower rates and transparent fee disclosures, and ensure your loan qualifies under Section 80E norms.
Those who take larger education loans, especially for overseas or professional degrees, stand to gain the largest tax savings due to the uncapped deduction on interest paid. Dual-income households and parents supporting more than one child through higher education also benefit the most when using Section 80E with other sections.
People also ask:
Q. What if I forget to claim Section 80E in a particular year?
A. You can revise your income tax return for the year, provided it falls within the permitted window for revisions.
Did you know? Section 80E does not require the loan to be for a full-time college degree—even diploma or part-time recognized courses qualify after Class 12.
With rising participation in digital and overseas courses, there is a growing trend among Indian students to use NBFCs and new-age lenders for education funding. However, it is important to check whether your chosen lender qualifies under RBI rules for Section 80E.
The government updates deduction limits occasionally. Always check the latest Income Tax notifications each budget season and use online marketplaces to stay updated on lender eligibility.
Expert Insight: Some fintech lenders specializing in study loans now provide digital interest certificates directly for ITR filing to make the claims process smoother.
A. Yes, you can claim deductions under both, as they cover different types of education-related expenses.
A. No, Section 80E does not specify any age limit for the borrower or the beneficiary.
A. The deduction is available for eight consecutive financial years from the year of repayment or until the interest is fully paid off, whichever comes earlier.
A. You can claim deduction only for the years during which you actually paid interest. After foreclosure or full repayment, the deduction ends.
A. Both can claim proportionately based on actual interest paid from their own taxable income, if both repay.
Source:
Income Tax Act, 1961 [https://incometaxindia.gov.in/pages/tax-information-services.aspx]
Reserve Bank of India: List of NBFCs [https://www.rbi.org.in]
Online Education Loan Marketplaces: BankBazaar, PaisaBazaar, IndiaLends
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Written by Prem Anand, a content writer with over 10+ years of experience in the Banking, Financial Services, and Insurance sectors.
Prem Anand is a seasoned content writer with over 10+ years of experience in the Banking, Financial Services, and Insurance sectors. He has a strong command of industry-specific language and compliance regulations. He specializes in writing insightful blog posts, detailed articles, and content that educates and engages the Indian audience.
The content is prepared by thoroughly researching multiple trustworthy sources such as official websites, financial portals, customer reviews, policy documents and IRDAI guidelines. The goal is to bring accurate and reader-friendly insights.
This content is created to help readers make informed decisions. It aims to simplify complex insurance and finance topics so that you can understand your options clearly and take the right steps with confidence. Every article is written keeping transparency, clarity, and trust in mind.
Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).
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