Education and Career Forum

Sir,
My name Sohaan Kaushik and I am working in CCL. I have taken an Education Loan of Rs. 2.2 Lacs from United Bank of India for my son who is pursuing MBA from Symbiosis. I have heard about Tax Rebate from one of my colleague. Can you tell me about this in details.

Dear Sohaan Kaushik, Yes, you are eligible for tax rebate on the interest paid on your education loan from United Bank of India. Here are the details:

- Under Section 80E of the Income Tax Act, 1961, you can claim a deduction for the interest paid on your education loan. This deduction is available only for individuals, not for companies or firms.
- The deduction is available for a maximum of 8 years or until the interest is fully repaid, whichever is earlier.
- You can claim the deduction only for the interest component of your EMI, not for the principal repayment.
- There is no limit on the amount of deduction you can claim, as long as it is for the interest paid on your education loan.
- The deduction is available only for loans taken for higher education, i.e. after passing the senior secondary examination or its equivalent.
- Higher education includes courses pursued after graduation, post-graduate courses, and professional courses like engineering, management, medicine, etc.
- The loan should have been taken from a bank or financial institution approved by the government for this purpose. United Bank of India is one such approved institution.
- You can claim the deduction in your income tax return for the relevant assessment year. For example, if you paid interest on your education loan in the financial year 2020-21, you can claim the deduction in your income tax return for the assessment year 2021-22.

To claim the deduction, you need to keep the following documents:

- Loan agreement or sanction letter from the bank or financial institution
- Interest certificate or statement from the bank or financial institution showing the amount of interest paid during the financial year
- Receipts or bank statements showing the EMI payments made towards the loan

I hope this information helps you in claiming the tax rebate on your education loan. Do consult a tax expert or chartered accountant for further guidance on this matter.