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