26 February 2013
Dear All, An employee has taken education loan for his son. Bank has given loan in the name of Son. Father's name is not mentioned any where. As per bank, loan can be given to the name of student not to the parents. Repayment has been made by father's account. case a) Could Father get the tax benefit u/s 80E for the interest paid by him.
case b) if repayment is being made from mother's account; her income is not chargeable to tax. Could father take the benefit under same section.
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 59[or for the purpose of higher education of his relative]
So if loan is not taken by assessee him self no deduction is allowed.
CAclubindia
