Section 80E —
Education Loan Interest Deduction
The full-interest, no-cap deduction on education loans: who can claim it, which loans and courses qualify, the 8-year window, and why it works only in the old tax regime.
Section 80E lets you deduct 100% of the interest paid on an education loan — with no upper limit. The loan must be taken from a bank or approved financial institution for the higher education of yourself, your spouse, your children or a student for whom you are the legal guardian. Only interest qualifies (not the principal), the benefit runs for a maximum of 8 consecutive years from the year you start repaying, and it is available only under the old tax regime.
Section 80E — Key Facts
Everything that defines the deduction in one table, current for FY 2025-26 (AY 2026-27).
| Parameter | Details |
|---|---|
| Deduction amount | 100% of interest — no upper limit |
| Principal component | Not deductible — interest only |
| Maximum period | 8 consecutive years from first repayment year |
| Who can claim | Individual only — not HUF, firm or company |
| Student beneficiary | Self, spouse, children, or a student you are legal guardian of |
| Course | Any higher education — in India or abroad |
| Lender | Scheduled bank, approved financial institution or notified charitable institution |
| Tax regime | Old regime only — not the new default regime |
Section 80E was not changed by Union Budget 2025. Under the Income-tax Act, 2025 (effective AY 2026-27) the same benefit is re-numbered but its conditions are unchanged.
Section 80E covers the interest portion of your EMIs only. The principal repayment on an education loan gets no deduction under any section. Use the interest certificate your bank issues each year — it splits interest from principal so you claim the correct figure.
Eligible Loans, Lenders & Courses
Only an individual can claim Section 80E, and the loan must be in that individual’s name for the higher education of self, spouse, children or a legal ward. The lender matters as much as the borrower.
| Lender type | Eligible? | Examples |
|---|---|---|
| Scheduled commercial banks | Yes | SBI, HDFC Bank, ICICI, Axis, Bank of Baroda |
| Public financial institutions | Yes | SIDBI, NHB, NABARD |
| Notified charitable institutions | Yes | Institutions approved u/s 10(23C) / 80G |
| Cooperative banks | No* | Most urban cooperative banks not approved |
| NBFCs | No* | Not eligible unless specifically notified |
| Employer / relatives / friends | No | Informal or company-sponsored loans do not qualify |
* Verify the lender is a “financial institution” approved for Section 80E before relying on the deduction.
You can claim 80E if
- You are an individual repaying an education loan interest
- The loan is from a bank or approved financial institution
- It funds higher education of self, spouse, children or your ward
- You are filing under the old tax regime
You cannot claim 80E if
- The borrower is a HUF, firm or company
- The loan is from an employer, relative or friend
- You are only repaying principal (no interest in the year)
- You have opted for the new (default) tax regime
How Long Can You Claim Section 80E?
The deduction is available for a maximum of 8 consecutive assessment years, counted from the year you begin repaying interest — not from the year the loan was sanctioned or the course started.
- The clock starts in the first year interest is paid.
- If the loan is fully repaid before 8 years, the benefit ends with the last interest payment.
- If interest is still being paid after 8 years, no deduction is allowed from year 9 onwards.
Old regime · 30% slab
New regime · same interest
If you have a large education loan interest outgo, the old regime plus 80E can beat the new regime’s lower slabs. Run both — with all your deductions (80C, 80D, HRA, home-loan interest) — before you lock a regime for the year. Our team compares both for you at filing.
Not sure which regime saves you more with 80E in the mix?
Compare with an Expert →Section 80E — Old vs New Regime
Old regime — 80E allowed
- 100% of education loan interest deductible
- Stacks with 80C, 80D, HRA, home-loan interest
- Best when total deductions are high
New regime — 80E blocked
- Section 80E and most Chapter VI-A deductions not allowed
- Only 80CCD(2) employer NPS & 80JJAA survive
- Lower slabs + ₹75,000 standard deduction instead
The new regime is the default from FY 2023-24, and its rebate under Section 87A now makes income up to ₹12 lakh taxable effectively tax-free. But it switches off Section 80E — so a borrower with heavy interest may still be better off in the old regime.
How to Claim Section 80E in Your ITR
While filing, go to Schedule VI-A (Deductions) → Section 80E and enter the total interest paid during the financial year from your bank’s interest certificate. No document upload is needed at filing, but keep the certificate safely. If your employer did not account for 80E in your Form 16 TDS, you can still claim it directly in your return.
- Interest certificate from the lending bank/institution
- Loan sanction letter (borrower & purpose)
- Proof of admission to a higher-education course
- Confirmation you are filing under the old regime
Section 80E — Frequently Asked Questions
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