Section 80E allows the eligible interest actually paid during the year, without a rupee ceiling, for up to eight assessment years starting with the first…
Section 80E allows the eligible interest actually paid during the year, without a rupee ceiling, for up to eight assessment years starting with the first year in which interest repayment begins or until the interest is fully paid, whichever is earlier. Principal is not deductible.
The deduction is available to an individual for interest on a loan from a financial institution or approved charitable institution for higher education of the individual or a relative. For this purpose, relative covers the spouse, children and a student for whom the individual is legal guardian. The section is ordinarily used under the old regime.
Priya starts repaying an eligible education loan in FY 2025–26 and pays ₹1,80,000 interest plus ₹2,40,000 principal. For AY 2026–27, the section 80E deduction is ₹1,80,000. AY 2026–27 is the first of the maximum eight assessment years, even if the loan was sanctioned three years earlier.
See the broader Income-tax Act 2025 study guide hub for related rules and calculators on this topic.
Section 80E allows the eligible interest actually paid during the year, without a rupee ceiling, for up to eight assessment years starting with the first year in which interest repayment begins or until the interest is fully paid, whichever is earlier. Principal is not deductible.
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