Education Loan Tax Benefit Under Section 80E — How to Save Up to ₹50,000 Tax Every Year
CampusCredit Research Team March 22, 2026 6 min read 43K monthly searches
💰 Section 80E Tax Benefit on Education Loan 2026
Save ₹50,000–₹1 Lakh+ Per Year in Income Tax — Complete Guide
No Limit
Deduction Amount
8 Years
Maximum Benefit Period
Interest Only
Principal Not Covered
What is Section 80E Deduction?
Under Section 80E of the Income Tax Act, 1961, an individual can claim a tax deduction on the interest paid on education loans. This deduction is available for up to 8 consecutive financial years starting from the year you begin repaying the loan, with no upper limit on the amount of interest you can deduct.
📊 Section 80E — Key Facts at a Glance
Parameter
Details
Who Can Claim
Individual taxpayer (student or parent who took the loan)
What's Deductible
Interest component only (NOT principal repayment)
Maximum Deduction
NO LIMIT — 100% of interest paid is deductible
Duration
Up to 8 consecutive years from first repayment year
Courses Covered
Any higher education course (India or abroad) at recognized institution
Loan Source
Must be from approved financial institution or charitable organization
Family Members
Can claim for self, spouse, children, or student for whom you're legal guardian
Tax Regime
Only under Old Tax Regime (NOT available under New Regime 115BAC)
💡 Real Tax Savings Example
Scenario: ₹15 Lakh loan at 10% = ₹1.5 Lakh interest per year
Annual Income
Tax Bracket
Interest Paid
Tax Saved (80E)
₹8–12 Lakh
20%
₹1,50,000
₹30,000/year
₹12–20 Lakh
30%
₹1,50,000
₹45,000/year
₹20 Lakh+
30% + surcharge
₹1,50,000
₹46,800–56,160/year
✅ Over 8 years: Total savings can be ₹2.4–4.5 Lakh+ in income tax!
📋 How to Claim Section 80E While Filing ITR
1
Get Repayment Certificate / Interest Certificate from your bank or NBFC showing breakup of principal + interest paid during the financial year.
2
While filing ITR-1 or ITR-2, go to Chapter VI-A → Section 80E and enter the total interest paid during the year.
3
This amount is deducted from your Gross Total Income before calculating your taxable income. No receipt submission needed — just keep the certificate.
4
Note: Make sure you're using the Old Tax Regime. Under New Tax Regime (115BAC), 80E deduction is NOT available.
❓ Common Questions About Section 80E
Can parents claim 80E if they took the loan for their child?
Yes! If the parent has taken the education loan and is the primary borrower, they can claim the 80E deduction on the interest paid — even if the child is earning.
Is there a deduction on principal repayment under 80E?
No. Section 80E only covers interest component. However, if you also took a home loan, Section 80C covers principal repayment for that (not education loan).
Can both student and parent claim 80E simultaneously?
No. Only the actual loan borrower (the person liable for repayment) can claim the deduction. If both are co-borrowers, only one can claim.
Does 80E apply to CampusCredit 0% EMI?
No. Section 80E applies only to loans from banks, NBFCs, or approved financial institutions. Since CampusCredit 0% EMI charges no interest, there's no interest to deduct — but you save money at the source (0% vs 10% bank rate).
🎯 Pay 0% Interest = Save Even More Than 80E
CampusCredit's 0% EMI means no interest to pay AT ALL — which beats any tax deduction. Check if your college is a partner.
"CampusCredit helped me fund my online MBA from NMIMS at 0% EMI. No bank visit, no collateral — just easy monthly payments. The CampusIQ team found the right university and CampusCredit handled the rest!"
People Also Ask
What is Section 80E deduction for education loan?
Section 80E allows deduction of the full interest paid on education loan from your taxable income. No maximum limit! Available for 8 years from repayment start.
Who can claim 80E deduction?
The loan borrower (student) or the parent/guardian who took the loan can claim deduction. The student must be pursuing higher education (UG/PG/professional course).
Is principal repayment also tax deductible?
No. Only the interest component is deductible under Section 80E. Principal repayment is not eligible for any deduction.
Does 80E apply to online degree education loans?
Yes! If the loan is from a recognized financial institution (bank/NBFC) for a UGC-approved online program, Section 80E deduction applies.
