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Last updated on: July 29, 2025
Section 80E of the Income Tax Act, 1961, provides a tax deduction on the interest paid towards education loans in India. This benefit is available to individual taxpayers who have taken loans for higher education for themselves, their spouse, or children from recognized financial institutions or charitable organizations. The deduction is available only on the interest component—not the principal—without any upper limit on the amount, for a maximum of 8 consecutive years starting from the year the repayment begins or until the interest is fully paid, whichever occurs first. Section 80E helps reduce the tax burden for those financing higher education, making quality education more accessible. To claim the deduction, proper documentation such as interest certificates from the lender is required during income tax filing.
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Read BioEducation is the greatest investment you can have in your future but in most cases, it is a very costly investment. The job of the Indian government is to know these challenges and provide reliefs on taxes to help in higher learning. Another popular section under the Income Tax is 80E whereby the taxpayers within India can claim deduction of their interest on education loan that makes higher education more accessible. The guide presents a coherent, comprehensive, and current review of what Section 80E offers, restrictions, processes, and its illustrative examples, as they stand in 2025.
The content of section 80E is a favorite income tax exemption, which assists an individual pay less tax on repayment of education loans. In case you or your family had availed a loan toward higher education, then the interest part of the EMI is reducible.
Under Section 80E you can avail deduction on interest on education loan taken towards your own education, education loan taken on behalf of your spouse, your child or a student whom you are a legal guardian. It does not cover the repayment of principal, but interest only.
As long as you pay the interest and principal of the loan, you can claim the deduction up to 8 consecutive years or until the interest is completely paid, whichever would come first. This is essential to students who would seek to study in India and overseas in 2025, as it would facilitate the flow of repayment years without worrying of having to forego the financial support.
This deduction is only applicable to the individual taxpayers.
Businesses or HUFs are not allowed to take the advantage of Section 80E.
The education loan must be with a known bank or accepted financial institution which may also include the NBFCs registered with RBI.
The borrowed money can only be utilized in higher education.
Pro-tip: Not all young professionals know that the education loan may be taken out on behalf of a spouse or a dependent child, still, you could claim Section 80E, which means the benefit would appeal to families with more than one learner.
Higher education includes any course, degree, or full-time study pursued after passing the Senior Secondary Examination (Class 12 or equivalent). These include graduate, postgraduate, intraprofessional and professional degree studies in India or abroad. The field of study is not restricted.
Section 80E is more lucid and realistic when it comes to tax-related benefits to you, facilitating your education loan in India repayment or even repayment planning.
The tuition fees are dependent on section 80C; the education loan interest cannot be deducted. The Section 80E and 80C may be taken together so you may get maximum rebate on both interest and expenses.
Ever heard? You can not claim twice the amount under the two sections but may claim one under each section to different payments which are relevant to your education.
No, there is no upper limit as to how much on interest paid in Section 80E. All the interest amounts paid during the financial year are claimable.
It is important that you get to know the advantages as well as limitations so that you can plan your taxes, and loan repayments accordingly.
Q. What happens when I borrow money as loan against Section 80E, say borrowing it out of my employers or friends?
A. No, it can only be taken on loans through financial institutions approved of, banks or NBFCs only.
One does not have to attach these documents unless requested by the tax department.
Insider hints: It is best to have them ready so that they can be checked at any time of audit. This will not only guarantee the processing of your claim easily, but will help avoid delays.
Section 80E deduction is available only to those Indian residents. But overseas studies can be funded by a loan but one has to be a resident tax payer.
First hand experience: Sanjay is a working professional in Hyderabad where he has taken an education loan of Rs. 10 lakhs in 2021 to fund the undergraduate engineering of his daughter in Singapore. In 2024, the family paid an interest of approximately Rs. 95, 000, annually. In the year 2025, when Sanjay undated his ITR he claimed the full interest paid as a deduction under section 80E, and it helped him save approximately 28,500 in the income tax annually in that year.
This is most appropriate to the provision of:
In case the whole amount is paid in less than 8 years, to get benefit under Section 80E that is to be continued only in those financial years when there is a loan and interest is charged.
| Feature | Section 80E | Section 80C | Section 10(14) Children’s Education Allowance |
|---|---|---|---|
| Covers Interest or Principal | Interest only | Principal (tuition fees) | NA |
| Ceiling Limit | No Limit | Rs 1.5 lakh/per year | Rs 1200/issued into the year per child |
| Individual | Individual/HUF | Salaried employees | |
| Tenure | 8 years | annual | Annual |
| Of what Expenses | Loan on higher education | Higher school/College fees | Higher school/college fees |
Do you know? By proper planning on taxing, most working parents would be able to merge all these provisions towards schooling and further studies of children.
Is it possible to claim a deduction of Section 80E on abroad education loan?
Yes, provided the course is a higher education and the loan has been availed of through a recognized financial institution in India, or an NBFC registered under RBI then you can avail the deduction.
Can I claim Section 80E on loan taken to do skill development/vocational courses?
Yes, this is applicable to any course that you undertake beyond Class 12 and even vocational courses as long as the loan is taken in a full time course.
When there are divorced parents, is it possible that they can deduct jointly on an education loan?
The deduction can only be claimed by the payer of the repayment and the one, in whose name the loan is taken.
What role can the Online Marketplaces play in selecting the best Education Loan that will get the best tax benefit under section 80E?
Financial marketplace online now has comparison tool where you can review education loan interest rates, processing fees, tenure and eligibility across leading banks and NBFCs in the same window. This assists you to select a lender who not only offers a good deal to you, but also allows you to secure tax benefit under Section 80E to the maximum.
Thanks to popular platforms, you can categorise loans based on study destinations, collateral requirements and repayment periods, and thus, make an informed decision regarding both education financing and tax planning objectives.
Expert Opinions: Product comparison on websites may help you get lower rates and visible disclosures, and make you satisfied that your loan would be qualified under Section 80E norms.
The tax saving will benefit more those who borrow more education loans especially those who seek education in foreign countries or a professional degree because interest paid is entirely deductible. The greatest benefits are also attained by dual income families and parents who are providing higher education to more than one child when using the Section 80E along with other sections.
Q. Suppose I do not remember to claim Section 80E in one year itself.
A. You have the provision to amend your income tax return of previous year, but it should be done within stipulated time allowed.
Did you know? Section 80E has no condition of the loan being a fulltime college degree - even diploma or part time recognized courses post Class 12 can be taken.
As students increasingly pursue digital and international curriculums, more and more non-banking finance companies and fintech lenders have begun serving Indian students as education financing providers. Nevertheless, one should ensure that the lender you decide to borrow from is supported by the RBI under the provision of Section 80E.
All the deduction limits are reviewed by the government periodically. The most up-to-date Income Tax notifications should also be referred to before and during the budget season and the online marketplaces should be used to track the eligibility of different lenders.
Industry Expertise: Certain fintech lenders issuing study loans are issuing online interest certificates directly to interest filing ITRs with the aim of streamlining of the claims process.
Q. Is it possible to avail Section 80C and Section 80E simultaneously?
A. Yes, you are allowed to claim deductions in each of them, since they relate to dissimilar expenses which have to do with education.
Q. Is it that you can not claim Section 80E on interest of education loan after a particular age?
A. No, not under Section 80E there is any age limit of either the borrower or the beneficiary.
Q. How many years is section 80E permitted?
A. The deduction can be taken up to eight consecutive years of financial years starting with the financial year in which the repayment is done or till the time the interest is cleared whichever earlier.
Q. After foreclosure of loans can I still set off Section 80E?
A. It is only those years when you actually paid interest that you can claim deduction. The deduction is eliminated once the foreclosure or full payment is made.
Q. And suppose it is taken by 2 people, this means that a loan is made by two people, whose Section 80E should be tax-saving?
A. Both proportions can claim on the basis of their respective interest payment against their own taxable income, in case both of them repay.
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Written by Prem Anand, a content writer with over 10+ years of experience in the Banking, Financial Services, and Insurance sectors.
Prem Anand is a seasoned content writer with over 10+ years of experience in the Banking, Financial Services, and Insurance sectors. He has a strong command of industry-specific language and compliance regulations. He specializes in writing insightful blog posts, detailed articles, and content that educates and engages the Indian audience.
The content is prepared by thoroughly researching multiple trustworthy sources such as official websites, financial portals, customer reviews, policy documents and IRDAI guidelines. The goal is to bring accurate and reader-friendly insights.
This content is created to help readers make informed decisions. It aims to simplify complex insurance and finance topics so that you can understand your options clearly and take the right steps with confidence. Every article is written keeping transparency, clarity, and trust in mind.
Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).
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