(i) Eligible assessee:
Section 80E provides deduction to an individual-assessee in respect of any interest on loan paid by him in the previous year out of his income chargeable to tax.
The loan must have been taken for the purpose of pursuing his higher education or for the purpose of higher education of his or her relative. The loan must have been taken from any financial institution or approved charitable institution.
(iii) Meaning of certain terms:
Spouse and children of the individual or the student for whom the individual is the legal guardian.
- Higher education
It means any course of study (including vocational studies) 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 authorized by the Central Government or State Government or local authority to do so. Therefore, interest on loan taken for pursuing any course after Class 12th or its equivalent
- Period of deduction
The deduction is allowed in computing the total income in respect of the initial year (i.e. the year, in which the assessee starts paying the interest on the loan) and 7 years immediately succeeding the initial year or until the interest is paid in full by the assessee, whichever is earlier.
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