Section 80E:
Deduction in respect of interest on loan taken for higher education.
1(1) In computing the
total income of an assessee, being an individual, there shall be deducted, in accordance with and subject
to the provisions of this section, any amount paid by him in the previous year, out of his income
chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved
charitable institution for the purpose of pursuing his higher education 2
or for the purpose of higher
education of his relative.
(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in
respect of the initial assessment year and seven assessment years immediately succeeding the initial
assessment year or until the interest referred to in sub-section (1) is paid by the assessee in full, whichever
is earlier.
(3) For the purposes of this section,—
(a) “approved charitable institution” means an institution specified in, or, as the case may be, an
institution established for charitable purposes and 3
approved by the prescribed authority under
clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;
(b) “financial institution” means a banking company to which the Banking Regulation
Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of
that Act); or any other financial institution which the Central Government may, by notification in the
Official Gazette, specify in this behalf;
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(c) “higher education” means any course of study pursued after passing the Senior Secondary
Examination or its equivalent from any school, board or university recognised by the Central
Government or State Government or local authority or by any other authority authorised by the
Central Government or State Government or local authority to do so;
(d) “initial assessment year” means the assessment year relevant to the previous year, in which
the assessee starts paying the interest on the loan;
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(e) “relative”, in relation to an individual, means the spouse and children of that individual or
the student for whom the individual is the legal guardian.
Notes:
1. Subs. by Act 18 of 2005, s. 25, for section 80E (w.e.f. 1-4-2006). Earlier omitted by Act 4 of 1988, s. 33 (w.e.f. 1-4-1989)
and later inserted by Act 32 of 1994, s. 23 (w.e.f. 1-4-1995).
2. Ins. by Act 22 of 2007, s. 27 (w.e.f. 1-4-2008).
3. Subs. by s. 27, ibid., for “notified by the Central Government” (w.e.f. 1-4-2008).
4. Subs. by Act 33 of 2009, s. 32, for clause (c) (w.e..f 1-4-2010).
5. Subs. by Act 33 of 2009, s. 32, for clause (e) (w.e.f. 1-4-2010). Earlier inserted by Act 22 of 2007, s. 27 (w.e.f. 1-4-2008).