Section 80E — Education Loan Interest Deduction 2025-26

Updated: 3 June 2026 | Income-tax Act 2025 | Old Regime Only | No Upper Limit

Section 80E allows deduction of 100% of interest paid on education loan — no upper limit. Available for loan taken from a bank/approved institution for higher education of self, spouse, or children. Deduction available for a maximum of 8 consecutive years from the year you start repaying. Only interest qualifies (not principal). Not available in new tax regime — must opt for old regime to claim this benefit.

No Limit

Section 80E — 100% of education loan interest deductible, no maximum cap.
Available for max 8 years. Old regime only. Bank/FI loans qualify — not loans from relatives or employers.

Section 80E — Key Facts

Parameter	Details
Deduction amount	100% of interest paid — no upper limit
Principal deduction	Not allowed (interest only)
Duration	Max 8 consecutive years from first repayment year
Lender eligibility	Scheduled bank, public FI, approved charitable institution
Borrower	Individual (not HUF/companies)
Student beneficiary	Self, spouse, children, or legal ward
Course requirement	Higher education — any stream in India or abroad
Tax regime	Old regime only — not available in new regime
Tax benefit example	₹2L interest × 30% rate = ₹60,000 tax saved

Which Loans Qualify for Section 80E?

Lender Type	Eligible?	Examples
Scheduled commercial banks	Yes	SBI, HDFC Bank, ICICI, Axis, Bank of Baroda
Public financial institutions	Yes	SIDBI, NHB, NABARD
Approved charitable institutions	Yes	Section 10(23C) approved trusts
Cooperative banks	No (most)	Urban cooperative banks generally not approved
NBFCs	No (most)	Most NBFCs not approved unless specifically notified
Employers	No	Company-sponsored education loans not eligible
Relatives/friends	No	Informal loans do not qualify

How to Claim Section 80E in ITR

At ITR filing: go to Schedule VI-A (Deductions) → Section 80E → enter total interest paid during the financial year (from bank's interest certificate). No document upload is required at filing, but keep the interest certificate for 7 years. If your employer did not account for 80E while computing TDS (Form 16), you can still claim it directly in your ITR.

Frequently Asked Questions

What is Section 80E deduction for education loan?

Section 80E allows deduction of interest paid on education loan taken for higher education. There is NO upper limit on the deduction amount — 100% of interest paid is deductible. Available for: loan taken from bank or approved financial institution for self, spouse, children, or student for whom you are legal guardian. The deduction is available for 8 consecutive assessment years starting from the year you begin repaying interest. Only interest is deductible — not the principal component.

Is Section 80E available in the new tax regime?

No. Section 80E deduction is NOT available under the new tax regime (from FY 2023-24 onwards). Section 80E can only be claimed if you opt for the old tax regime. If you have significant education loan interest and are in a high tax slab, the old regime may be more beneficial. Example: ₹2 lakh interest × 30% tax rate = ₹60,000 tax saving in old regime, whereas new regime offers zero benefit for this interest.

What loans qualify for Section 80E deduction?

Section 80E qualifies for: Loan from scheduled banks (SBI, HDFC, ICICI, etc.), public financial institutions (SIDBI, etc.), approved charitable institutions. NOT eligible: Loans from employers, relatives, friends, cooperative banks (most), non-approved NBFCs. Course eligibility: any higher education (graduation, post-graduation, professional courses) in India or abroad. The loan must be specifically for tuition fees and related education expenses.

For how many years can I claim Section 80E?

Section 80E is available for a maximum of 8 consecutive years — starting from the year you begin paying interest (not when you take the loan). If your interest payments end before 8 years (loan fully repaid), the benefit stops. If loan continues beyond 8 years, no deduction from year 9 onwards. The 8-year period is from the year of first EMI/interest payment, regardless of when the loan was taken or when the course started.

What documents are needed to claim Section 80E deduction?

Documents for Section 80E: Interest certificate from the lending bank showing interest paid during the financial year; Loan sanction letter; Course admission proof (optional but good to have). At ITR filing: enter the interest amount in Schedule VI-A under Section 80E. No document upload needed while filing ITR — keep documents for 7 years in case of scrutiny. TDS Form 16 does not always reflect this — claim it yourself in ITR if employer did not account for it.

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