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

News Snippets

  • The government will make new IT rules to make it mandatory for platforms to provide traceability of content
  • PM Modi says India striving to move to evidence-based policy making by 2022
  • Patna High Court says that courts are clogged with cases against prohibition in the state
  • NCP-Congress say unanimity reached on government formation in Maharashtra, talks with Sena today
  • Surrogacy Bill referred to 23-member select committee by the Rajya Sabha
  • Government has asked the IITs to follow the quota system in hiring faculty
  • Gujarat police say self-styled godman Nithyanand has fled the country
  • Muslim parties are split over seeking review of the Ayodhya verdict
  • Indian skipper Virat Kohli says the pink ball could pose a lot of challenges due to its weight, hardness and colour
  • India to play its first pink-ball Test match against Bangladesh from Friday at the Eden Gardens in Kolkata
  • In reply to a question in Parliament, the government says it is empowered to lawfully intercept, monitor or decrpyt information stored in a computer resource in the interest of sovereignty or integrity of India
  • Police stop a 12-year old girl on her way to the Sabarimala shrine
  • In Karnataka, the JD(S) indicates that it might support the BJP government if it falls short of numbers after the bypolls
  • Congress pips the BJP in local body elections in Rajasthan, winning 961 wards to the BJPs 737
  • After Airtel and Vodafone-Idea, Jio also indicates that tariffs will be raised from December
Two Muslim litigants in Ayodhya refuse to accept the Supreme Court order, say review petition might be filed
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.