How an Education Loan Can Help You Save Tax

A good education paves the way for a successful career.

But did you know it can save taxes too?

If you have an education loan, it definitely can! Know how.

Section 80E of the Income Tax Act

Section 80E allows a deduction on the interest paid for the education loan. You can claim a deduction for up to 8 years.

There’s no limit on the deduction amount. The entire interest paid on the loan is allowed as a deduction from your taxable income.

This deduction lowers your net taxable income. As the taxable income lowers so does the income tax payable on it and you can save tax. 

For instance, if you paid an interest of Rs.2 lakhs in a financial year on the education loan and you fall in the 30% tax bracket, you save a tax of Rs.60,000. 

Resident individuals can claim the tax deduction if the loan is taken to fund the education of self, their children or spouse.

So, study and save on taxes with IDFC FIRST Bank Education Loans, offering collateral-free loans up to Rs. 50 lakhs.