Live Mint ;Wed, Oct 02 2013. 06 16 PM IST
However, the principal repayment will not qualify for tax benefit.
To pursue higher studies, I took an education loan of Rs.7 lakh. Now that I am employed, I pay around Rs.15,500 as equated monthly instalment (EMI) including interest. Am I eligible for any tax benefit?
The interest paid on an education loan taken to pursue higher education qualifies for tax benefit/deduction. However, the principal repayment will not qualify for tax benefit. Accordingly, out of the total monthly EMI of Rs.15,500, you can avail deduction only towards interest portion of the EMI. The deduction can be availed for eight financial years (FYs) starting from the FY in which you have started paying interest.
Further, the tax deduction is allowed only if the education loan has been availed from any banking company or notified financial institution or any approved charitable institution. Higher education includes any course of study pursued after finishing senior secondary examination or its equivalent from any recognized school, board or university or any other authorized authority.
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