Good news! Now parents can claim income tax benefit on overseas educational loan

Zee Media Bureau

New Delhi/Pune: In what could bring smile to lakhs of parents whose children are studying abroad,  the Pune Income-tax Appellate Tribunal (ITAT) has allowed deduction for interest paid on educational loans taken for higher studies from the taxable income, as per a report in the Times of India.

The interest amount pertains to such loans, meant for overseas studies, taken by the parent of the ward, the paper added.

Section - 80E, Income-tax Act, 1961-2014,explains deduction in respect of interest on loan taken for higher education.

The first clause says, "80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education 97[or for the purpose of higher education of his relative]."

A recent report, The 2015 `Open Doors Report on international educational exchange, has said that the number of Indian students heading to the US for higher education recorded a robust jump of 29.4 percent to 1,32,888 in the 2014/15 academic year, beating China in terms of growth.