oppn parties Study Abroad and Get Deduction for Interest Paid on Edu Loan

News Snippets

  • Government planning a loan mela to cover 400 districts in two phases
  • PM Modi says Kashmiris need a hug from all Indians
  • NPA tag will not be put on any MSME till March 20
  • Government likely to announce another economic stimulus package today ahead of the GST Council meet in Goa
  • Air Marshall RKS Bhadauria, slated to retire just a few days from now, to be the next chief of IAF
  • PM Modi slams politicians from his own party who are making irresponsible statements on the Ayodhya case and tells them to wait for the Supreme Court order
  • Telecom panel says resident welfare associations (RWA) cannot give monopoly access to any one service provider and infrastructure in public spaces and residential complexes will have to be shared by all
  • Mamata Banerjee meets Amit Shah, tells him there is no need for an NRC in Bengal
  • After 14 days, there is no hope left for reviving Vikram, the moon lander
  • CBI teams search for elusive Rajeev Kumar
  • Union minister Babul Supriyo assaulted at Jadavpur University
  • West Bengal governor's convoy not allowed to enter Jadavpur University following a blockade by Left students' union
  • ABVP supporters create ruckus at Jadavpur University in Kolkata
  • The Army conducts an operational alert exercise in eastern Ladakh
  • The IAF reopened the Vijaynagar advance landing ground, an airstrip in Arunachal Pradesh near the Chinese border
Government announces cuts in corporate income tax, stock markets welcome the decision with a massive jump
oppn parties
Study Abroad and Get Deduction for Interest Paid on Edu Loan

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
Section 80E of the Income Tax Act says that parents can claim deduction for interest paid on any education loan taken for their children’s higher education. The only criterion prescribed is that such loan must be taken from banks, financial institutions or approved charitable organizations. Higher education has been defined as “any course of study pursued after passing the senior secondary examination (SSE) or its equivalent from any school, board or university recognized by the Central government, state government, local authority or any recognized authority.” Nowhere is it stated that course for higher studies must be pursued in India.

But some overzealous income tax officers (ITO) have been regularly disallowing the interest paid on such loan if the child is pursuing a course abroad. They will not be able to do so anymore as the Income Tax Appellate Tribunal (ITAT) in Pune has categorically stated that the section does not say that such higher education courses must only be pursued in India in order to get tax benefit.

The stated objective of this section was to promote higher education in a class of persons who had the will and the ability but not the means. It did not differentiate between study in India or abroad for the simple reason that it was promoting education and not educational institutions. Instead of reading the section as a whole, these ITOs decided that the second half of the higher education definition meant that the higher education course must be recognized by the Central government, state government, local authority or any recognized authority. Now with this ITAT order, things have become clear.