Is educational loan exempted from tax Lakhani, 22 Oct 2012

Is educational loan exempted from tax??

Fintotal Answer

As per section 80E of income tax act, deduction is available for amount paid towards interest payment of education loan with following conditions: Loan should have been taken for higher studies of Self, Spouse, Children or of the student of whom individual is legal Guardian. Loan should only have been taken for Higher studies, full-time programs, graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics; or vocational studies. This deduction is available in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest is paid by the assessee in full, whichever is earlier. If total repayment tenure exceeds eight years, you cannot claim deductions beyond eight years. Eduction loan should have been taken by Assessee. If your parents, spouse or sibling has taken the loan for your studies, then you are not entitled to get tax benefit. Whole amount of interest paid is eligible for deduction and there is no upper limit on this deduction. But there is no benefit available on the repayment of principal amount of the loan. There is no condition that the course should be in India.

Does delay in repayment of education loan affects ur CIBIL

User Name, 23 Sep 2013

Yes, any sort of borrowing from banks and lending institutions is reflected in your credit report. This includes loans and credit card outstanding.

Fintotal Answer,23 Sep 2013

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