In this guide
What is the Section 80E deduction?
Section 80E of the Income-tax Act, 1961 allows an individual to deduct eligible interest paid on an education loan. For AY 2026-27, this applies to qualifying interest paid during FY 2025-26, from 1 April 2025 to 31 March 2026.
The deduction is available under the old tax regime, not the default new tax regime. It reduces taxable income; it is not a direct reduction in your tax bill.
Who can claim it?
You may claim the deduction if:
- You are an individual who took the loan for higher education for yourself or a qualifying relative.
- The loan was obtained from a bank, a financial institution notified for this purpose, or an approved charitable institution.
- You paid the interest during FY 2025-26.
For Section 80E, a relative means your spouse, your children, or a student for whom you are the legal guardian. The course must be higher education pursued after passing the Senior Secondary Examination or its equivalent from a recognised institution. It may include vocational courses that meet the statutory requirements.
A loan from a friend, relative or employer does not qualify simply because you used it for education. Check the lender and loan documents before claiming.
How much can you deduct?
You can deduct the eligible interest paid during the year. There is no fixed rupee cap, but the deduction is available only for a limited period. Principal repayments do not qualify.
The deduction is allowed for the initial assessment year in which you start paying interest and the next seven assessment years, or until the interest is paid in full, whichever happens first.
| Item | Section 80E treatment |
|---|---|
| Eligible interest paid during the permitted period | Deductible, subject to conditions |
| Principal repayment | Not deductible |
| Interest paid after the permitted period | Not deductible under Section 80E |
| Interest accrued but not yet paid | Not deductible for that year |
Example: If you first pay interest in FY 2022-23, the initial assessment year is AY 2023-24. The eight assessment years run from AY 2023-24 to AY 2030-31, unless the interest is paid in full earlier. Interest paid during FY 2025-26 may qualify for AY 2026-27 if it falls within that period and meets the other conditions.
Which documents should you keep?
Ask the lender for an annual certificate or statement showing interest separately from principal. Keep it with:
- The loan sanction letter and loan account details.
- The lender’s name and evidence that it is a qualifying financial institution or approved charitable institution.
- Records showing who received the education and their relationship to you, where relevant.
- Payment records for interest paid during FY 2025-26.
These documents are not normally uploaded with the return, but keep them in case they are requested.
How to claim Section 80E in your ITR
If you are eligible and want to claim Section 80E, select the old tax regime for AY 2026-27. Report the eligible interest paid in the relevant Chapter VI-A deduction schedule of the applicable ITR. The correct ITR form depends on your income sources and other eligibility conditions.
Before filing your return:
- Match the interest certificate with the amount claimed.
- Confirm that you are within the eight-assessment-year period.
- Claim interest only, not principal.
- Verify the return and save the acknowledgement.
TaxClear’s salaried employee ITR guide and online ITR filing guide for AY 2026-27 explain the return process. The income tax calculator can help you compare the old and new tax regimes.
Frequently asked questions
Is there a maximum amount for the Section 80E deduction?
There is no fixed rupee cap on eligible interest paid, but the deduction is limited to the permitted period and other conditions.
Can I claim principal repayment?
No. Section 80E covers eligible interest paid, not principal repayment.
Can I claim interest on a loan from a family member?
Generally, no. The loan must be from a bank, qualifying financial institution or approved charitable institution.
Can I claim Section 80E under the new tax regime?
No. Section 80E is not available under the default new tax regime for AY 2026-27.
When does the eight-year period start?
It starts in the assessment year in which you begin paying interest, not necessarily the year you took the loan.
