Section 80E of the Income Tax Act is one of the few deductions with no upper limit. You can deduct the entire interest paid on an education loan in a year — ₹50,000 or ₹5 lakh — from your taxable income.
Yet a significant number of education loan borrowers never claim it, either because they do not know it exists or because they are unsure whether they qualify.
Who Can Claim Section 80E
- The borrower (student) — if the loan is in their name and they are repaying
- A parent — if the parent took the loan for the student's higher education
- Spouse or legal guardian — also eligible if they are the borrower
The loan must be from a recognised financial institution or approved charitable institution — not from family members or employers. Most bank and NBFC education loans qualify automatically.
How Much You Save at Each Tax Slab
| Annual Interest Paid | Tax Slab 20% | Tax Slab 30% |
|---|---|---|
| ₹50,000 | ₹10,000 saved | ₹15,000 saved |
| ₹1,00,000 | ₹20,000 saved | ₹30,000 saved |
| ₹1,50,000 | ₹30,000 saved | ₹45,000 saved |
| ₹2,00,000 | ₹40,000 saved | ₹60,000 saved |
Add 4% cess to the tax figure to get the actual saving. At 30% slab with 4% cess, the effective saving rate is 31.2% of interest paid.
For How Many Years Can You Claim It
Section 80E is available for 8 consecutive assessment years starting from the year you begin repayment. If you start repaying in FY 2025–26, your last eligible year is FY 2032–33 — regardless of whether the loan is fully repaid by then.
If the loan is repaid in 5 years, the deduction stops at that point. The 8-year window is a ceiling, not a guarantee of 8 full years of deductions.
What Counts as Interest for 80E
Only the interest component of your EMI qualifies — not the principal repayment. Your bank provides an annual interest certificate (also called a repayment certificate or loan statement) that shows how much of the year's payments went to interest. Submit this when filing ITR.
If the moratorium interest was capitalised (added to principal), the interest component of the EMI during repayment is typically higher in earlier years — which means the Section 80E benefit is largest when your income may also be growing. The timing works in your favour.
How to Claim It When Filing ITR
- Obtain the interest certificate from your bank — most banks issue this in April for the previous financial year
- In ITR-1 or ITR-2, enter the interest amount under Chapter VI-A deductions → Section 80E
- No supporting document needs to be submitted — but keep the certificate in case of scrutiny
Use the GearsKit education loan calculator to see the interest breakdown year by year — so you can estimate your 80E deduction for each financial year before the actual certificate arrives.
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Aditya Menon
Verified AuthorChartered Accountant (CA) · Tax & Salary Structuring Specialist
Aditya Menon is a practising Chartered Accountant based in Chennai with 11 years in direct taxation and salary structuring for salaried professionals. He has filed returns for 2,000+ clients across the new and old income tax regimes and writes specifically about decisions that move real money — HRA exemption, 80C optimisation, EPF contribution rules, and the break-even point between tax regimes. His articles are reviewed against the latest Finance Act and CBDT circulars before publication.
