Taking out a student loan has several benefits! You may be eligible for tax benefits while repaying your college debt. After receiving loan approval for your education, you are eligible for tax advantages from the IRS.
The tax code provides you with advantages that allow you to save money. A "tax advantage" is a tax policy that permits you to minimize your tax burden, provided you fulfill particular qualifying criteria. A tax advantage might come in the form of a credit or a deduction.
Interest paid on your student loan is subtracted from your total taxable income when calculating taxable income. Because STEM students earn more than their counterparts, the tax savings are enormous.
Take a look at the tax advantages you may be eligible for if you apply for an education loan to study abroad.
Section 80E of the Income Tax Act of 1961 gives various tax advantages for a loan utilized for higher education. Because the full interest may be erased, the loan's effective cost is decreased. Both the applicant and the co-signer are eligible for this benefit. The entire cost of the education loan might be decreased in this way.
Income tax deductions are only available for interest paid.
For more than eight years, no deductions may be claimed.
Benefits are available to you and your parents, whichever pays off the loan first.
You are only eligible for tax benefits if you take out a loan from a licensed institution.
The year you start paying interest on your loan, you can start claiming tax advantages. If you begin paying on this debt within the same year that you obtained it, you can deduct the interest you paid.
You can claim deductions for up to 8 years, starting with the year you start repaying the loan's interest or until the debt is completely paid off.
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