What are the Tax Benefits from Education Loan
Continuous increase in education funds has become a headache for the parents today. They worry about their children’s higher education. Also, the pace in other sector like in tax on income, daily expenses are the factors which breaking the parents backbone.
So in this dilemma, parents need a support and relaxation to make their dream become true through children. In this situation, parents approach for education loan. Now we will explain in this article how you can avail tax benefits from education loan
What is the scenario of deduction?
In this scenario, a borrower can claim for the deduction from tax on income, respectively the amount of interest rate you are charging on taken loan. There is no relaxation to repayment of the loan amount that stay as it is.
And there is no obstacle to claim to tax benefit respective to tuition fee paid for the course from loan and interest rate on that. Or you can apply for both.
When can you claim for deduction? And for how much time it is going?
- The deduction from tax is equivalent to amount of interest rates paid by you to the bank. You should remember to take certificate after pay the interest.
- The deduction gets started when a person pay off his first EMI for the loan.
- This deduction is going up to the eight years after the claim in loan tenure period.
- In case you stop this deduction during education period, then it will start later. And no one obey to claim beyond the constitutive period of eight years.
What are the courses to elect for deduction benefit?
There are some courses which are considered to take deduction benefit as following:
- Education loan to pursuing any course after senior secondary education is covered in this purpose. Before the 2009 budget, it was only for regular courses like graduation and post graduation, engineering or medical etc.
- It is necessary the course should pursue from government approved school, college or university.
- The deduction in tuition fee, you can claim for fee relaxation if two children are studying under the section 80 C. In both cases if education institute in India or outside the India.
Who can claim for deduction?
A person can claim for the deduction if they have taken loan for their child’s education, for their spouse and for a child for whom they serves as a guardian. It is advisable to take a loan for your own or for you children.
Points to remember
Repay the loan within decided time period. Otherwise, a defaulter tag will get fixed with your name. As a result, your credit history will suffer and the chances of loan approval get reduced.