Taking out a student loan has several benefits! You may be eligible for tax benefits while repaying your student loans. After receiving a loan approval for your education, you are eligible for tax advantages from the Income Tax Department.

The interest on your student loan is deducted under Section 80E of the Income Tax Act of 1961. This tax incentive is only available to individuals who are only pursuing higher education. Within the country, both vocational and academic education, as well as foreign education, are regarded.

You'll need paperwork from your bank or financial institution that splits the principal and interest components of your EMIs and separates the principal and interest components of your EMIs to qualify for this benefit.

Other Factors to Consider When Considering Section 80E Tax Deductions:

• The income tax benefit only applies to the loan's interest component. A tax benefit is not available for the principal component.

• The whole interest component of the returned loans can be deducted from your taxable income.

• No maximum amount of interest may be imposed on a loan for higher education.

• The tax benefit is available to those who have taken out an education loan to pay for higher education for themselves, their spouse, children, or a student for whom they are the legal guardian.

• Student loans taken out for siblings or other relatives are not eligible for the Section 80E deduction.

• Only if the loan was taken out in the borrower's name may a tax deduction be claimed.

This benefit lasts eight years or until your loan's interest component is paid off, whichever comes first. However, you must get an education loan from one of India's scheduled banks or one of the two Gazette Notified Financial Institutions listed below in order to qualify for income tax benefits under Section 80E, as stated by the Income Tax Act of India, 1961.