Tax deductions on student interest loan payments outside India?



I make loan interest payments to financial institutions in the U.S. for student loans that I took for graduate studies in the U.S. I currently work in India. Am I eligible for tax deductions in India for these payments? Please let me know. Thank you.

Tax deductions on student interest loan payments outside India?
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One Reply to “Tax deductions on student interest loan payments outside India?”

  1. The deduction for educational loan is allowed as per provision u/s 80E of the I T Act. One of the condition for allowance of deduction is that it should be taken from Indian banks or financial institution notified by Govt of India.

    Read the provision u/s 80E

    80E. (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

    The term Financial institution is defined under the same section as under

    financial institution means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette99, specify in this behalf;

    Since you have taken loan from a US financial institution which may not be a banking company under Banking Regulation Act or notified as financial institution, you MAY NOT get the deduction u/s 80E of the I T Act.





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