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Tax Deductions under Section 80E during Online ITR Filing

Online ITR Filing

The most powerful tool for personal & professional development is Education. In the era of a growing economy, education expenditure also increases. Usually, pursuing higher studies becomes a financial burden, and thus, students & their families turn to the education loan. As the government of India knows the importance of education, it provides various tax benefits, including tax exemption under Section 80E of the Income Tax Act. Individual taxpayers can claim the tax exemptions on the interest paid on education loans during Online ITR Filing. Here, in this blog, we will jump into the deep ocean of tax benefits on Education loans. To get a clear picture of Tax exemptions under section 80E, you can seek the expert guidance of ITR Filing Consultants.

However, before moving ahead, let’s have a proper understanding of Income Tax Returns & ITR Filing online.

Income Tax Return is a self-declaration form that has been used by the public for the declaration of their income. On the other hand, income tax return filing is the process by which taxpayers (individuals as well as businesses) can report their income, deductions, and credits to the government. Tax authorities use this information to calculate the amount of tax payable or the refund due. 

Understanding Section 80E for Online ITR Filing

Under section 80E of the Income Tax Act, you can claim an exemption for the interest paid on loans that have been taken for higher education. You can claim this exemption only on the interest amount of the loan and but not on the principal amount. The objective of this provision is to promote the higher education by reducing the financial burden of aspiring students & their families. You can claim this deduction from the taxable income for the interest paid on loans taken for higher studies of yourself, your spouse, or your children (including for those for whom you are the legal guardian).

Who Can Claim Education Loan Deduction during Online ITR Filing?

Not everyone can claim deductions under Section 80E of the Income Tax Act. There are some eligibility criteria set by the government that allow students to claim education loan deductions while filing an ITR. Here, given the eligibility criteria-

  • Individual Taxpayer

The deduction under Section 80E is applicable only to the individual taxpayer. HUFs (Hindu Undivided Families), companies & any other kind of taxpayers are not eligible for education loan deduction.

  • Loan for Higher Education

The education loan should be taken for the higher studies of self, spouse, children, or a student for whom you are a legal guardian. Parents can easily claim the deduction under Section 80E of the Income Tax Act for the higher studies (pursuing after passing the Senior Secondary Examination) of their children.

  • Old Tax Regime

You can claim the deduction under Section 80E (education loans) on if you opt for the old tax regime during Income Tax Return Filing. This deduction is not applicable for the taxpayers who opt for a new tax regime. 

  • Loan from Financial Institution

You will be eligible to claim an education loan deduction only when you have taken the loan from any bank, financial institution, or any approved (certified) charitable institution. But if you take a loan for higher education from friends or relatives, you cannot claim this deduction.

  • Time Period

You can claim education loan deductions only for eight years from the year you start to repay the loan or until the complete interest amount will be repaid (whichever is earlier).

To claim the deductions under Section 80E of the Income Tax Act, you must remember the eligibility criteria. You will be eligible for the education loan deduction only if you fulfill the given criteria. For any confusion, you can contact the CA near me for ITR Filing.

Key Features of Education Loan Deduction during Online ITR Filing

To claim a deduction under Section 80E of the Income Tax Act, you should have complete knowledge of its key features. Here, in this section of the blog, we will discuss about the features of these deductions to file Income Tax Return. 

  • Deduction on Interest

You can claim the education loan deduction only on the interest component of the loan. The repayment of the principal amount of the loan is not eligible for any tax benefits under this section.

  • Duration of Deduction

You can claim deduction under section 80E only for a maximum of 8 years from the year you start repaying the loan or until the interest is fully repaid (whichever is earlier). For instance, if you repay the loan completely in 5 years, you can claim this deduction for only 5 years and not for eight years.

  • Purpose of Loan

To claim this deduction, the loan must be taken for the higher education after the Senior Secondary Examination in any field. It doesn’t matter whether you pursue your higher education in India or abroad.

  • No Upper Limit

There is no minimum or maximum limit of the interest amount for which you claim the deduction under Section 80E. We can say that no matter how high the interest amount, the entire amount will be deducted from your taxable income.

  • Eligibility

You must take the loan from any bank, financial institution, or any certified charitable institutions in order to claim deduction under Section 80E of Income Tax Act. Loans taken from friends & relatives will not be eligible for this deduction.

Benefits of Education Loan Deductions during Online ITR Filing

There are some major benefits of deductions under Section 80E of the Income Tax Act. Here we will discuss them–

  • Promoting Higher Education

The government of India has an objective of encouraging higher education among the masses by offering education loan deductions. It will reduce the financial burden on students & their families so that they can pursue advanced degrees as well as specialized courses.

  • Reduce Tax Liability

The deduction under Section 80E of the Income Tax Act will reduce your tax liability and also helps you to save tax.

  • No Maximum Limit

There is no limit of interest amount that you can claim under section 80E of the Income Tax Act. It will be beneficial for those who want to pursue expensive courses including medicine, engineering, or education in abroad, for which interest amount can be high.

These are the major benefits of claiming education loan deductions.

Why Legal Pillers is best for Online ITR Filing to Claim Education Loan Deductions?

Among the various options available in the competitive market, Legal Pillers stands as the premier choice of taxpayers to file Income Tax Return specifically of those who want to claim deductions under Section 80E. Here are the reasons-

  • Maximize Tax Refunds

Legal Pillers will help you in maximizing your tax refunds by claiming deductions under Section 80E of Income Tax Act precisely. Our professional team of experts will tell you about all the possible ways that reduce your tax liability.

  • Minimize Stress

With Legal Pillers, you will get the peace of mind. Our team is there to handle everything and reduces your stress, you stay relaxed. We will also make sure about the education loan deductions (if applicable).

  • Secure and Reliable

Sometimes people thought that online platform is not secure. Legal Pillers have a completely secure & reliable online platform as your privacy is our priority. You can stay calm, making sure that your sensitive information is in safe hands.

  • Save Time and Effort

Our dedicated team of professionals has the exceptional expertise in filing ITR. Our top notch services will save your time and effort so that you can focus on growing your business.

These are the reasons why Legal Pillers provide you the best ITR Filing Consultants in order claim all the applicable deductions (including deductions under Section 80E) accurately. You will get the best assistance at your fingertips. You can easily find us online by searching CA near me for ITR Filing. We are just a few clicks away.

Final Words

It will be a good idea to claim education loan deduction during Income Tax Return Filing. Section 80E of the Income Tax Act proves to be a significant relief for the taxpayers who repay their education loans. Education loan deduction reduces the financial burden of higher education and hence also encourages the more individuals to pursue their dream of advanced studies. If you have taken an education loan then it will be advisable to you to utilize the benefit of education loan deduction. It will make your financial strain easy. If you have any confusion regarding Section 80E of the Income Tax Act so that you can seek the professional guidance of expert ITR Filing Consultants like Legal Pillers.

Legal Pillers provide you the service of seamless ITR Filing. We have a dedicated team of professionals having expertise in filing your ITR. We also make sure that you claim all the applicable deductions including deductions u/s 80E (if applicable) accurately. So what are you waiting for? Choose Legal Pillers as your trusted partner in order to claim all the deductions properly while filing ITR.

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