is interest paid toward study loan provide tax benefit?

hi! i had taken study loan for my i have joined a company.plse tell me is there any way so that i can get tax benefit .
if i pay my interest towards my loan ,can the interest amount is liable to tax exempt

plse also tell me the area where i should invest to to get tax benefit(i don’t want to take lic policy).

7 Replies to “is interest paid toward study loan provide tax benefit?”

  1. If you are talking of Indian Tax regulations yes,
    The Interest is exempted for tax under sec 80 E, You must consult your HR/ Finance and declare that..

    They will include that in your form 16

  2. YES, interest paid for study loan can be considered for income tax deduction. Some of the tax saving investments are
    ELSS (Equity LInked Saving Scheme) — 3 years lock period
    Housing Loan
    NSC (National saving Certificate) — 7years lock period
    PF/PPF — around 15years is maturity — 15years lock period

  3. Yes interest is exempt u/s.80E. Principal portion is not exempt. Deduction available for 8 Asst. years including first year of repayment.
    Other modes of invt. are NSC, tax saver Mutual Funds, PF, PPF, Annuity schemes, deposit with NHB, tax saver FD with bank etc…
    But I personally suggest mutual funds.
    Moreover Housing loans are the best way to save tax.

  4. ‘Section 80E’: Deduction in respect of interest on loan taken for higher education.—

    (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative, “relative”, in relation to an individual, means the spouse and children of that individual.’.

    (2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest referred to in sub-section (1) is paid by the assessee in full, whichever is earlier.

  5. Deduction u/s 80E

    Higher education means full time studies for any graduate or post-graduate course in engineering, medicine, management or for a post-graduate course in applied sciences or pure sciences, incldg. mathematics or statistics.

    Conditions :-

    1. The deduction is available only to individual assessee.
    2. The individual must have taken the loan from (a) any financial institution (b) any approved chartiable insitution.
    3. The loan must have been taken for pursuing higher education. Such education must be of tax payer him/herself.
    4. Deduction shall be allowed only in respect of any sum paid by him, in the previous year byw ay of interest on such loan.
    5. Such amount should be paid out of his income chargeable to tax.

    Quantum – The amount paid during previous year towards interest.

    period – Deduction shall be allowed for eight assesment years starting from the assessment year in which the assessee starts paying the interest on loan, or until the interest thereon is paid by the assessee in full, whichever is earlier.

    In a long term – you can plan for PPF / NSC.

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