Sec 80E-Interest on education loan

[BHARAT COKING COAL LIMITED]

A person is not able to get Education loan...So he is planning to get a Personal Loan solely to get used for the purpose of the higher education of his son studying abroad...Whether he will be getting the interest benefit u/s 80E? Whether it is mandatory to get education loan only for getting benefit u/s 80E? Is the nature of transaction not important, given the fact that he is ready to maintain a seperate bank a/c to prove that the loan was used solely for the purpose of higher education of his son abroad....

An early opinion on the aforesaid issue is solicited...

Thanks...

[Ganeshan Kalyani]

The loan should have been taken for the purpose of education. The provision does not states that loan should be in the name of education loan , the purpose of the loan is essential. The loan should have been taken for education. Hence i infer that you can take the benefit of interest paid on the loan taken for education.

AI Summary

Interest deduction for education loans applies where the loan is taken for education, irrespective of loan label. Eligibility for the interest deduction depends on the purpose of the loan, not its label; the loan need not be formally called an education loan. Interest on a personal loan used solely for financing higher education may qualify if the taxpayer can demonstrate that the proceeds were applied exclusively for education.