Is Education Loan Exempt from Tax?: Yes, an education loan is exempt from tax. Under Sections 80E and 80C of the income tax act, the education loan has few tax benefits. The total interest to be paid on the education loan is exempted from the tax.
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How Does an Education Loan Works?
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- The tax deduction on education loans is based on Section 80E of the Income Tax Act, of 1961.
- The income tax benefit can be availed on the interest amount of the education loan. So, the principal amount can be claimed for any tax benefit.
- The total interest amount of the education loan repaid is deductible when calculating the taxable income.
- An individual can claim tax benefits if they have taken an education loan to support higher studies for themselves, their spouse, or children or guardian.
- The income tax deduction can be claimed by a person under the clause that the loan has been taken in their name.
- This special deduction can be availed for education loan to study abroad.
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- Students don’t need to pay any early repayment fees for education loans.
- In fact, interest rates decrease, if your bank finds that you are paying loan repayments on time.
- Education loans are generally flexible which means the individual can take their time to pay up, as long as they are making regular payments. The interest payable for the amount increases if you take longer to pay the amount.
- Education loans may not require any assets but they need a guarantor.
- Tuition fees, hostel fees, and travel fees are covered in the loan.
- Education loans can be taken for diplomas and other professional courses as long as they are been taken for higher education by the bank you are borrowing from.
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- Can I get a tax exemption on an education loan?
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- Is education fee exempted from income tax?
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- Which loan is exempt from tax?
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- Can I get an education loan without an income tax return?
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Hoping that the data shared here about Is Education Loan is Exempt from Tax is useful for you. Education loan is exempted from the tax is only interest for 8 years. Get to know more articles like what is moratorium period in education loan , How To Pay Education Loan Without Interest , at our site.
