Lesson 3 of 3 · 5 min
Section 80E, and why this debt follows you
The interest deduction has no rupee cap but an 8-year clock that starts at the first interest payment — and the loan itself never bends to your salary.
Section 80E of the income-tax law lets the person repaying claim a deduction for the INTEREST on an education loan, with no rupee cap at all. There are three catches.
It covers interest only, never principal. The loan has to come from a bank, a notified financial institution or an approved charitable institution — money borrowed from a relative does not count. And it is available under the old tax regime only.
The 80E fine print
- Cap on the deduction
- None — every rupee of interest qualifies
- Years it can be claimed
- 8, or until the interest is fully repaid — whichever comes first
- When the 8-year clock starts
- The year interest is FIRST PAID — not the first EMI
- Regime where it is available
- Old regime only
Myth
“If I don't land a job, the bank waits until I do.”
False
An Indian education loan is ordinary debt, not an income-linked one. There is no earnings threshold below which payments pause, and no write-off after a number of years. Once the moratorium ends, the EMI is due regardless of salary; the co-borrower parent is equally liable; and missed EMIs mark both credit reports.
Sort it
1 / 5
Swipe: does this qualify for the 80E deduction?
Interest on a bank loan for your own postgraduate degree
Check yourself
1 / 3
Kabir asks
How much interest can be claimed under section 80E in a year?
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