intt education loan 80E deduction to parent
This query is : Resolved
21 June 2010
If student has taken laon and his parents are paying intt on this loan to Bank Can the parent claim deduction Or the Deduction will be allowed to the person to whom the bank advanced loan
21 June 2010
Deduction will be allowed to the person to whom the bank advanced loan.
21 June 2010
No, Dear Sanjay
With effect from AY-2010-11 the provision has changed even for spouse, child, relatives can be claimed
With effect from AY-2010-11 the provision has changed even for spouse, child, relatives can be claimed
21 June 2010
deduction will not be allowed.
21 June 2010
The Section 80E(1) of the Incometax Act, reads as follows:
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 87[or for the purpose of higher education of his relative].
Section 80E(3)(e) defines the term relative as follows:
(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.]
So if the parent has taken he loan the interest would be allowable in his hands.
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 87[or for the purpose of higher education of his relative].
Section 80E(3)(e) defines the term relative as follows:
(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.]
So if the parent has taken he loan the interest would be allowable in his hands.
21 June 2010
"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"
Sir this is posted by you and it clearly says on loan taken by his and is the person making repayment. But over here the loan is taken by son and not "him" i.e. The aseessee. Hence parents can not claim the deduction.
Sir this is posted by you and it clearly says on loan taken by his and is the person making repayment. But over here the loan is taken by son and not "him" i.e. The aseessee. Hence parents can not claim the deduction.
21 June 2010
In view of the 80E provisions the following points arise
The deduction will be available to the SON, if he has taken the loan for >
- Himself
- His spouse or children
- The child for whom he is the legal guardian.
The deduction will be available to the FATHER, if he has taken the loan for >
- Himself
- His spouse or children (son in given case)
- The child for whom he is the legal guardian.
In view of this, in the given case, son has taken the loan, so the deduction will be available to the Son only.....So I think Mr. Sanjay is right in the given scenario.
The deduction will be available to the SON, if he has taken the loan for >
- Himself
- His spouse or children
- The child for whom he is the legal guardian.
The deduction will be available to the FATHER, if he has taken the loan for >
- Himself
- His spouse or children (son in given case)
- The child for whom he is the legal guardian.
In view of this, in the given case, son has taken the loan, so the deduction will be available to the Son only.....So I think Mr. Sanjay is right in the given scenario.
22 June 2010
Agree with Sanjay sir...
to claim deduction loan should be in name of assessee and payment should also me made by assessee...
Loan can be taken for relative as mentioned in definition...
Hence definately Interest wont be claimed by his parents...
Practical point of view: If salary of parents is high than do claim it.. IT dept wont bother small amounts....they just see the interest payment...
But if the son is also salaried than do it for son only....
to claim deduction loan should be in name of assessee and payment should also me made by assessee...
Loan can be taken for relative as mentioned in definition...
Hence definately Interest wont be claimed by his parents...
Practical point of view: If salary of parents is high than do claim it.. IT dept wont bother small amounts....they just see the interest payment...
But if the son is also salaried than do it for son only....
22 June 2010
AGREE WITH SANJAY GUPTA
22 June 2010
AGREE WITH SANJAY GUPTA
27 June 2010
thanks very much for clraring the point
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