Education loans not only help you bridge any shortfall in savings for higher education but also provide tax deduction for unlimited interest repayment under Section 80E. Details of tax savings under Section 80E and what to keep in mind while taking the education loan from the tax point of view. Edited highlights 0:29 Education loans help you bridge the shortfall in your savings for higher education. You get tax benefits too
1:50 When you raise a loan to get admission for your higher studies i.e any study after the 12th is considered higher studies.
2:03 You get a tax deduction for the interest payment you make on this loan. It doesn’t give you any benefit for return of principal.
2:30 There is no upper limit for the tax deduction. There are upper limit to education loans.
2:55 Distinction between higher studies in India and abroad
3:38 Interest for that loan for studies is eligible for tax deduction
4:21 You get tax deduction on the actual repayment of the interest. Loan must be obtained from a bank or a financial institution or a charitable trust. Loans from relatives doesn’t qualify.
5:44 It is the student who should be paying since he will earning by the end of the moratorium and can start paying from his income.
5:52 After the moratorium, the student typically starts earning and can get a tax deduction from his or her income
6:11 In most cases, it is better from the tax planning point of view that the children repay the loan
