Loan from bank being used for education loan

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  1. sjainrly

    sjainrly New Member

    In the anticipation of admission to a new course, i took a topup loan of Rs 12,00,000 from the bank, after finalisation of admission i applied for education loan of Rs 35,00,000 but bank allowed only 20,00,000 on the pretext that topup already taken do not permit ful value of loan. i have to use both topup and edu loan amount for paying fees.
    kindly advise if i can claim deduction under 80 E for entire amount of 32,00,000 or not . I am a salaried person in the 30% bracket.
     
  2. ZED

    ZED Well-Known Member

    The amount of deduction is not correct. Kindly go through the following provision.



    80E.
    (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 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.
     
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