30 June 2009
Interest paid on Loan for higher education of self or relative is permitted to be deducted from total income u/s 80E. As per the model terms suggested by IBA, parent of the student will be a co-borrower of loan for higher education of the student. Banks issue certificate at the end of each financial year showing the amount received towards principal and inerest. A typical bank certificate shows names of both the borrowers. But the banks generally will not be in a position to issue separate certificates for the amounts paid by each of the co-borrowers. In the above circumstances, how can an assessee claim deduction, especially after the student secures a job. What is the documentary evidence to be obtained by an employer before deducting the interest from the salary of an employee for the purpose of TDS. Are there any guidelines of I.T. Dept in this regard.
01 July 2009
The employee needs to satisfy the employers with the necessary proof of payment of Interest directly from his account and the payment is not made by the co borrower.
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