Higher Education Loan and Tax Relaxation in India

1. From assessment year 2008-09, you can claim a deduction under section 80 E of the Income-Tax Act for the interest paid on an educational loan.
2. The loan has to be from a financial institution or a government approved charitable institution.
3. You can avail Tax benefit only if the loan is in your name and is taken for the purpose of higher education of yourself, your spouse or your children.
4. There is no ceiling limit on the amount that will be eligible for the deduction.
5. This deduction is allowed for a maximum period of eight assessment years beginning from the year in which the interest is paid or until the interest payable on such loan stands paid in full, whichever is earlier.
6. No deduction, however, is available for the principal that you repay.