Are there any possibilities of getting tax benefits even though you have not availed an education loan?

I am 51 years married and reside with 2 sons in Dharwad. I had availed a loan against my property for a financial emergency. I also used part of the loan to pay the engineering fees of my son. I have heard that there are tax benefits on an education loan. Can I get the tax benefit even though I have not availed an education loan?

Asked by : Omkara - Dharwad | 25 Views

You get a tax benefit under Section 80E if you avail a loan for the higher education of self, spouse or children. Deduction can be claimed by an individual only if the loan has been taken in his/her name. The deduction allowed is the total interest part of the EMI paid during the financial year. There is no limit on the maximum amount that is allowed as deduction. No Tax benefit is allowed for the principal repayment. The loan should be taken from any Bank / financial institution or any approved charitable institutions. The deduction for the interest on loan starts from the year in which you start repaying the loan. It is available only for 8 years starting from the year in which you start repaying the loan or until the interest is fully repaid whichever is earlier.You have availed a loan against property and used part of the money to finance your sons engineering studies. 1. It is always better to avail an education loan as you don't have to show proof it's taken for higher studies. Your asset (land) is not pledged and you don't have the headache of a mortgage. In this case as your LAP is already sanctioned, you can use it to fund the higher studies of your son. 2. You are eligible for the tax benefits under Section 80E even though this is not an education loan. All you have to do is prove the loan against property was used for the higher education of your son. You can provide college/engineering fee receipts of your son and claim the tax benefit.