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Section 80 E deduction

Dhruv Gaglani (Learning) (278 Points)

29 July 2010

Can anyone enlighten me whther interest paid on loan taken for Education in a foreign country is eligible for deduction u/d Section 80E?

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6 Replies

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 29 July 2010

DEATR DHRUV,

DEDUCTION UNDER SEC 80E WOULD BE ALLOWED SUBJECT TO :

1. DEDUCTION WOULD BE ALLOWED ONLY FOR INTEREST PAID ON SUCH EDUCATIONAL LOAN

2. LOAN SHOULD BE TAKEN ONLY FROM BANKS, FINANCIAL INSTITUTIONS OR APPROVED CHARITABLE INSTITUTIONS.

3. LOAN SHOULD BE TAKEN FOR FULL TIME GRADUATE OR PG COURSE ON ENGINEERING , MEDIINE, MANAGEMENT OR PG IN APPLIED SCIENCE OR PURE SCIENCE.

4. IT IS IRRELEVANT WHETHER U PERSUE COURSE IN INDIA OR OUTSIDE INDIA.

5. INTEREST ON LOAN SHOULD BE PAID ONLY OUT OF THE INCOME WHICH IS NOT EXEMPT FROM TAX.

IF ALL THIS 5 CONDITIONS SATISFIES, U WOULD BET DEDUCTION U/S 80E

ALL THE BEST

REGARDS,

MANOJ

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CA. BIJENDER KR. BANSAL (ACA, B.COM) (8148 Points)
Replied 29 July 2010

iN SECTION 80 E, ANYWHERE IT IS NOT PROVIDED THAT HIGHER STUDIES SHOULD BE INDIA ONLY.

HENCE YOU CAN TAKE DEDCUTION IF YOU SATIFY ALL OTEHR CONDITIONS.

FOR DETAILS ANALYSIS ON ALL ABOUT DEDUCTION U/S 80E , CLICK ON BELOW LINK

https://www.taxguru.in/income-tax/deduction-under-section-80e-for-interest-on-education-loan-taken-for-self-and-relatives.html

R.S.G. (student C.A. final b.com m.com) (41 Points)
Replied 01 August 2010

NO,

interest paid by the assessee on loan taken by him for higher education is allowed as deduction u/s80E only in india .

loan taken for higher education in foriegn country , the interest amount paid on that amount of loan is not allowed as deduction .

regards

RSG

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 01 August 2010

HI RSG,

IT IS NO WHERE WRITTEN IN SEC 80E THAT DEDUCTION WOULD BE ALLOWED ONLY IF THE EDUCATION TAKEN IN INDIA. WILL U PLEASE CONFIMR WHERE IT IS WRITTEN IN SEC 80E THAT DED WOULD BE AVAILABLE ONLY FOR STUDIES INDIA.

REGARDS,

MANOJ

Dhruv Gaglani (Learning) (278 Points)
Replied 03 August 2010

Thanks all of you for the replying..

Finance Act (No. 2) 2009 inserted clause 'c' to subsection 3 which says“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;]"

Thus according to me loan only if availed for education in India, would be eligible for deduction..!!

Am I right in assuming this?

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CA. BIJENDER KR. BANSAL (ACA, B.COM) (8148 Points)
Replied 03 August 2010

AS PER CLAUSE E, HIGHER EDUCTION MEANS ANY COURSE AFTER PASSING

I.E 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.

CONDITION FOR RECOGNISED BY CG/SG IS FOR BASIC EDUCATION WHICH IS REQUIRED FOR HIGHER EDUATION.

I.E HIGHER EDUCATION MAY BE OUTSIDE INDIA.

AS PER MAXIMUM ARTICLES ON SECTION 80E, THERE IS NO CONDITION THAT COURSE SHOULD BE IN INDIA..

YOU CAN SEE BELOW LINK ALSO.

https://www.simpletaxindia.org/2008/03/deduction-for-higher-education-loan-80e.html