Deduction under section 80e

This query is : Resolved

godachappa.i angadi (Querist)
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21 February 2014 I have availed an education loan for my son's higher education Rs.250000/-and paid interest thereon Rs.28500/-on 24.12.2013 to the Society named as Dharwad Taluka Rural Primary school teachers' co op credit society ,Dharwad I am a primary school teacher working in Dharwad Taluka Govt.of Karnataka, The co operative society is Regd.under karnataka co op society.s act 1959 and in bye law provision is made of loan facility to education & housing are to the members of society thereonly . can I get exemption under section 80E for pursuing higher restricted to my son on production of society's loan certificate .Kindly explain in detail

CA. Brijesh Baranwal

CA. Brijesh Baranwal (Expert)
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21 February 2014 Prima facie, it seems that you are eligible for deduction. Please find out from the society if they are covered under this section or not.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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21 February 2014 In fact there is restriction of taking loan for education purpose and if you take the loan from any financial institution or registered trust then it is eligible. For your knowledge I am reproducing the section

17[Deduction in respect of interest on loan taken for higher education.
80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education 18[or for the purpose of higher education of his relative].
(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest referred to in sub-section (1) is paid by the assessee in full, whichever is earlier.
(3) For the purposes of this section,—
(a) "approved charitable institution" means an institution specified in, or, as the case may be, an institution established for charitable purposes and 19[approved by the prescribed authority] under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;
(b) "financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette20, specify in this behalf;
21[(c) "higher education" means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or local authority or by any other authority authorised by the Central Government or State Government or local authority to do so;]
(d) "initial assessment year" means the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan;]
22[(e) "relative", in relation to an individual, means the spouse and children of that individual or the student for whom the individual is the legal guardian.]

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