As per Section 80E , interest taken on loan for pursuing higher education is allowed as deduction.But if an individual takes a loan (for self/ for his son) from any Bank outside India (say any Bank in US or ICICI Bank Newyork Branch ) is deduction available.
10 Replies
Ram Thakkar
(CA final )
(126 Points)
Replied 16 March 2011
Hey I think deduction is allowed but in this section 80E not specify anywhere.....but i think allowable.....
Pankaj Arora
(Learner)
(3134 Points)
Replied 16 March 2011
Yes individual can claim deduction u/s 80E for his son..
Piyush Mohta
(Credit )
(41 Points)
Replied 16 March 2011
I have read in one article which says that it is not allowed if you borrowed from Bank outside India
(Guest)
Dear friend,
Section 80E is silent about the word outside india... ( go for bare act for clarification )... hence, any individual can claim deduction u/s 80E for the interest paid for himself / relatives ( relative means spouse and children, adopted child also eligible ). The deduction is available for immediate assessment year or suceeding seven assessment years, whichever is earlier...
hope u doubt is clarified to some extent...
<<suggestions, clarifications are invited>>
(Guest)
According to Section 80 E…
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 repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan.
"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 Gazette, specify in this behalf.
Any Foreign Bank would not fall within the ambit of “Financial Institution” as mentioned in the Section. Hence, Interest on Loan taken from the Foreign Bank would not allowed as a deduction U/s 80 E.
Pankaj Arora
(Learner)
(3134 Points)
Replied 16 March 2011
But ICICI bank has PE in india so you could take deduction…
Piyush Mohta
(Credit )
(41 Points)
Replied 16 March 2011
https://www.smartmoneyindia.co.cc/2009/03/interest-on-education-loan-tax-planning.html
As per article in this link and as per explanation given by Mr Sunil ,
It clearly says that interest is not allowed if money is borrowed from Bank outside India.
CA abhinandan agarwal
(CA CS Bcom(H))
(174 Points)
Replied 16 March 2011
no word is financial institution not covered foregin bank
(Guest)
| Originally posted by : abhinandan agarwal | ||
 |
no word is financial institution not covered foregin bank |
 |
Dear abhinandan ,
can u please elloborate ??
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