Hello sir, My son had taken education loan from a nationalised bank at Puri to pursue his undergraduate studies in 2006 with I as his guarantor. After his studies were over he went to undergo further studies in Bangalore. He is a research scholar at IISc Bangalore right now.So I have been paying his loan principal and interest. This March, I transferred from my bank account a sum of Rs 40,000 to my son's bank account for the payment of interest and rest of the principal left. He later paid the amount to the loan account to pay off the interest in one of the branches of the bank in Bangalore . Can I claim tax deduction for the interest for last financial year as the interest certificate is in my son's name and the money was transferred from his savings account to the loan account, although I have proof of transfer from my account to my son's? Would be happy to get a quick response. Regards Pitambar Panda
Dear Sir,
As you mentioned loan was taken in 2006 and section 80E allows interest deduction for eight assessment years following the year in which you started paying interest. Eight years lapsed in 2014 if I assume interest payment started from 2016.
Thanks
Hi,
No you will not be able to claim the benefit on account of 2 reasons.
1. To claim exemption the loan has to be in your name. Since the loan is in your son's name, you cannot take the benefit.
2.The deduction on education can be claimed only when you start the repayment and is available up to eight years, or until the payment of interest in full, whichever is earlier. In this case the 8 year period has already lapsed and hence no benefit can be taken now.
You can get in touch with me for further clarifications.
Regards,
Nikhil.
Hi Pitambar
No, you cannot claim such deduction. Based on the above facts, you have lapsed with the 8 years time frame for which deduction can be claimed.
Deduction under section 80 E is available only for 8 years starting from the year in which you start repaying the loan or until the interest is fully repaid whichever is earlier.
Dear Sir,
No, you will not be avail to claim the deduction u/s 80E.
The deduction for the interest on loan starts from the year in which you start repaying the loan. It is available only for 8 years starting from the year in which you start repaying the loan or until the interest is fully repaid whichever is earlier. It means if entire payments are done in 5 years only, then tax deduction will be allowed for 5 years and not 8 years.
It should also be noted that if your loan tenure exceeds 8 years, then you cannot claim a deduction for the interest paid beyond 8 years. So it is always advisable that education loan should be paid within eight years.
Thanks & Regards,
Payal Chhajed
Hi Sir,
Only an individual can claim deduction u/s 80E. It is not available to HUF or any other kind of taxpayer. And the loan should be taken for the higher education of self, spouse or children or the student for whom the individual is a legal guardian. Thus parents can easily claim this deduction for the loan taken for the higher studies of their children.
Based on above interpretation of section 80E of I.T. Act,you claim deduction only for the interest component paid to the bank for educational loan.
Hope your query is resolved!
Hi Pitambar,
You cant claim the deduction for following reasons:
1. The deduction for the interest on loan starts from the year in which you start repaying the loan. It is available only for 8 years starting from the year in which you start repaying the loan or until the interest is fully repaid whichever is earlier.
2. Loan and interest certificate is in your son's name. It should be in your name and money should go from your account to loan account.
Hi
Since the loan is not on your name so no deduction can be claimed by you. Further under 80E deduction is available only for 8 years or till interest repayment ,whichever is earlier.
Hope it resolves your query
