05 April 2014
yes the amount of interest paid on the loan taken from the financial institution for studies abroad or in India is allowed as the deduction under section 80E starting from the year in which the payment has been made. Thus payment of interest is important. Deduction can be claimed uptill 8 yrs (including the yr in which payment is made for the first time) or till the payment of interest ends whichever is earlier. Thus if suppose you are going to pay interest for 6 yrs then the deduction will be available for only 6 yrs and not 8yrs. Similarly if the payment of interest is for say 10 yrs then the deduction will be available only for 8 yrs.
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