1. Applicability: Individual
2. Nature of expenditure: Payment of interest on educational loan taken from Financial Institution or approved Charitable Institution for the purpose of pursuing Higher Education for himself or for his relative i.e. spouse and children of the individual (W.e.f.A.Y. 2010-11, student for whom the individual is the Legal Guardian is also eligible)
3. Conditions for deduction:
- Maximum Amount: Any amount of interest paid is eligible for deduction. Principal Repayment is not eligible for deduction.
- Period: Deduction is available for a maximum period of 8 Assessment years including first year of repayment or until the interest is fully repaid, whichever is earlier.
- Payment from taxable income: Payment should be made out of income chargeable to tax.
- Meaning of Higher Education: W.e.f.A.Y. 2010-11, Higher Education means any course pursued after passing the Senior Secondary Examination conducted by any Board or University recognized by Central Government or State Government or Local Authority or any other authority authorized by Central or State Government.
