ueducLlon under secLlon 80L for lnLeresL on educaLlon Loan Laken for self and

relaLlves

Pave you Laken an educaLlon loan Lo supporL hlgher sLudles of yourself or of your spouse
Chlldren or for Lhe sLudenL of whom you are legal guardlan and you are noL aware of Lhe Lax
beneflLs LhaL you are enLlLled Lo 1hen here ls a gulde LhaL wlll asslsL you Lo know Lax beneflLs
on educaLlon loans 1hese beneflLs help you Lo reduce Lhe overall cosL of your educaLlon loan
1he deducLlon under secLlon 80L ls avallable Lo an lndlvldual lf followlng condlLlons are
saLlsfled

1 ueducLlon avallable only Lo lndlvldual noL Lo Pul or oLher Lype of Assessee

2 ueducLlon amounL 1he amounL of lnLeresL pald ls ellglble for deducLlon and moreover
Lhere ls no cap on Lhe amounL Lo be deducLed ?ou can deducL Lhe enLlre lnLeresL amounL from
your Laxable lncome nowevet tbete ls oo beoeflt ovolloble oo tbe tepoymeot of ptloclpol
omooot of tbe looo

ueducLlon avallable lf lnLeresL ls been pald durlng Lhe prevlous year and was pald ouL of
lncome chargeable Lo Lax whlch means lf repaymenL ls made from lncome noL chargeable Lo
Lax Lhan deducLlon wlll noL avallable
noLe Larller Lo prevlous year 200607 Lhe above deducLlon was avallable only for lnLeresL on
loan Laken and repald by Lhe assessee for hls own sLudles

lnLeresL should have been pald on loan Laken by hlm from any flnanclal lnsLlLuLlon or any
approved charlLable lnsLlLuLlon for Lhe purpose of pursulng hls hlgher educaLlon lnLeresL on
Loan Laken from relaLlves or frlends wlll noL be ellglble for deducLlon under secLlon 80L

a approved charlLable lnsLlLuLlon means an lnsLlLuLlon speclfled ln or as Lhe case may
be an lnsLlLuLlon esLabllshed for charlLable purposes and approved by Lhe prescrlbed
auLhorlLy under clause (% of secLlon 10 or an lnsLlLuLlon referred Lo ln clause (o% of
subsecLlon (2% of secLlon 80C

flnanclal lnsLlLuLlon means a banklng company Lo whlch Lhe 8anklng 8egulaLlon AcL
1949 (10 of 1949% applles (lncludlng any bank or banklng lnsLlLuLlon referred Lo
ln secLlon 31 of LhaL AcL% or any oLher flnanclal lnsLlLuLlon whlch Lhe CenLral
CovernmenL may by noLlflcaLlon ln Lhe Cfflclal CazeLLe speclfy ln Lhls behalf

S Loan should have been Laken for Lhe purpose of pursulng hlgher sLudles of lndlvldual
Spouse Chlldren of lndlvldual or of Lhe sLudenL of whom lndlvldual ls legal Cuardlan
Plgher sLudles means fullLlme sLudles for any graduaLe or posLgraduaLe course ln englneerlng
medlclne managemenL or for posLgraduaLe course ln applled sclences or pure sclences
lncludlng maLhemaLlcs and sLaLlsLlcs
ocome tox Jepottmeot bos oJJeJ (wef A % oJJltloool flelJs of stoJles (locloJloq
vocotloool stoJles% potsoeJ oftet possloq tbe 5eolot 5ecooJoty xomlootloo ot lts epolvoleot
ftom ooy scbool 8ootJ ot uolvetslty tecoqolseJ by tbe eottol ot 5tote Covetomeot wlll olso be
coveteJ ooJet JeJoctloo lo tespect of lotetest polJ oo looo tokeo fot blqbet eJocotloo

lnLeresL should have been pald for Lhe loan Laken for Lhe purpose of pursulng hls hlgher
educaLlon or of Lhe spouse and chlldren lrom A? 201011 8elaLlve also lncludes stoJeot fot
wbom tbe loJlvlJool ls tbe leqol qootJloo

Deduct|on per|od ueducLlon shall be allowed ln compuLlng Lhe LoLal lncome ln respecL of
Lhe lnlLlal assessmenL year* and seven assessmenL years lmmedlaLely succeedlng Lhe lnlLlal
assessmenL year or unLll Lhe lnLeresL ls pald by Lhe assessee ln full whlchever ls earller
1he Lax beneflLs on educaLlon loan are only valld once you sLarL Lhe repaymenL and moreover
Lhey are only avallable up Lo elghL years lor lnsLance lf your loan Lenure exceeds elghL years
you cannoL clalm for deducLlons beyond elghL years
Pence lL ls beLLer LhaL Lhe educaLlon loan ls repald wlLhln elghL years unless lf Lhe loan amounL
ls very hlgh and lL ls dlfflculL Lo afford a hlgh amounL of equaLed monLhly lnsLallmenL (LMl% one
should noL opL for educaLlon loan wlLh longer Lenure
*oltlol ossessmeot yeot meoos tbe ossessmeot yeot televoot to tbe ptevloos yeot lo wblcb tbe
ossessee stotts poyloq tbe lotetest oo tbe looo

Loan shou|d e |n the name of Ind|v|dua| ueducLlons on educaLlon loan can only be
clalmed lf Lhe loan has been Laken ln your own name lf your parenLs spouse or slbllng has
Laken Lhe loan for your sLudles Lhen you are noL enLlLled Lo geL Lax beneflL

9 1he loan lncludes noL only LulLlon or college fees buL also oLher lncldenLal expenses for
pursulng such sLudles llke hosLel charges LransporL charges eLc

10 8epaymenLs of educaLlon loan nC1 covered under SecLlon 80C

11 @bete ls oo cooJltloo tbot tbe cootse sboolJ be lo oJlo