If a person takes education loan,he has to repay both principal and interest.

This deduction is only for Interest repayment


Deduction available in 8 years starting with the year repayment of Interest starts


Suppose loan taken on 1.6.2012 but  Repayment starts from 1.6.2014

Then deduction will start from Financial Year 2014-15 onwards till  2021-22

Suppose in 2014-15,Rs 100000 Total amount repaid (60000 Principal +40000 Interest),then Deduction is available in Section 80E  only of Rs 40000



(1) This deduction is for Interest paid on

      Education loan


      Higher education



Higher education means any course pursued

after passing Senior Secondary Examination (Class XII)

 of any board or similar by  CG /SG /approved authority.



(3)This loan may be taken for EDUCATION OF

     (a) Assessee himself

     (b)or Relative (Relative means children,spouse,legal guardian)

It doesnt matter whether relative is dependent or not 


(3)  Deduction is only for Individual (Not for Others like HUF)


4) Loan must be taken from

     (a) Any financial institution (bank etc.)

     (b) Any charitable institution (approved)


5) This interest must be paid from his income chargeable to tax otherwise deduction not available




Mr. B has taken three education loans on April 1, 2015, the details of which are given below:

Particulars Loan 1 Loan 2 Loan 3
For whose education loan was taken B


of B


of  B

Purpose of loan MBA B. Sc. B.A.
Amount of loan  5,00,000 2,00,000 4,00,000
Annual repayment of loan 1,00,000 40,000 80,000
Annual repayment of interest 20,000 10,000 18,000

Compute the amount deductible under section 80E for the A.Y. 2016-17.

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During the financial year 2015-16, Amit paid interest on loan availed by him for his son's higher education. His son is already employed in  a firm.

Will Mr.  Amit  will get the deduction under section 80E.

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.