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Can I Get Any Tax Exemptions On An Education loan?

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Kushi BL
Can I Get Any Tax Exemptions On An Education loan?

Can I Get Any Tax Exemptions On An Education loan?

 

The cost of education is on the rise. And students often find themselves spending their entire savings on it. Do you belong to this group? If yes, an educational loan is the best solution available. Channel your education by availing a loan via an aggregator that can only help you cut down the taxes and reap more benefits. An advice board suggests that you choose Buddy Loan. You can increase your credit score too.

If you have studied abroad, you know one thing for sure. The educational expenses there are much higher than that of India. Tuition fees, expenses to buy must-have study materials, travel, accommodation; the list of requirements is endless. This situation prompted the Government to offer tax relief to educational loans. Thus Section 80E came into being.

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What does Section 80E mean?

Section 80E of the Income Tax Act offers relief to anyone repaying an educational loan. It exempts the interest on the loan. The exemption does not apply to the principal amount. Given below are some of the helpful insights in this regard.

  1. What are the eligibility requirements?

You should be an individual either salaried or self employed.

Should be a citizen of India.

 No entity like HUF (Hindu Undivided Family) is allowed to avail of the benefit.

You can fund your higher education or that of your child with the loan. Local guardians, too, are eligible to receive this benefit.

  1. Where should I apply for the loan?

The relief is not available for the loan taken from your friends or family. You should apply for it with your bank or with a registered charitable trust.

  1. What should be the purpose?

The tax benefit applies to any type of educational loan; for higher education in India and abroad.

  1. What is the deductible amount?

You can avail of this tax-deduction on the total interest of the loan. There exists no limit on the maximum. And to avail the deduction, you need to submit a certificate from your bank. It should separate the principal amount and the interest paid during a specific period. You can have the tax deduction for the total amount of interest.

  1. What is the term period allowed for the deduction?

The tax benefit for your educational loan starts from the time you begin its repayment. And it is available only for 5 years from that time. Or it may end when you finish repaying the loan. In short, the tax benefit for your loan ends when you finish repaying your loan. And it should not exceed eight years.

The Central Government has also expanded the reach of this benefit. Earlier, this relief was available only for full-time regular courses. Today, you can avail of tax-exemption even for vocational courses.

Take an educational loan, fund your higher education, and give wings to your dreams!

Apply instant student loan online through Buddy Loan.

 

 

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