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

News Snippets

  • Former Pakistani cricketer Shoaib Akhtar proposes an Indo-Pak ODI series to raise funds for fighting coronavirus
  • Maharashtra government says many Tablighi Jamaat members who attended the Markaz and returned have gone into hiding
  • West Bengal government identifies hotspots in Kolkata and the rest of the state, inclined to extend the lockdown in those places only
  • Prime Minister Modi holds a video conference with floor leaders of opposition parties, hints at extending the lockdown
  • UP seals hotspots and makes masks mandatory
  • Masks made compulsory in Mumbai, violators will be arrested
  • ICMR says an infected person can infect 406 people in 30 days without social distancing and lockdown
  • Stock markets make a smart recovery. Sensex up by record 2476 points on global cues
  • Schools, colleges and shopping malls likely to remain closed for a further period of one month, says empowered group of ministers
  • PM Modi tells BJP workers that India is in for a long battle against the coronavirus and there is no scope to feel tired or defeated
  • PM Modi asks ministers to focus on exports and new areas and sectors
  • PM Modi asks ministers to prepare business continuity plan post the lifting of the lockdown
  • Corona cases in India cross 4000 and the death toll stands at 124
  • The government decides to double the testing of corona suspects from 10000 now to 20000 in the next three days
  • Flipkart assures employees that there will be no job or salary cuts due to the COVID-19 pandemic
COVID-19: 773 new cases and 32 deaths in the last 24 hours, reports the health ministry
oppn parties
Study Abroad and Get Deduction for Interest Paid on Edu Loan

By Sunil Garodia
First publised on 2015-12-20 09:00:59

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.