Section 80E of Income Tax Act "Deduction in respect of interest on loan taken for higher education"
80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative.
(2) The deduction specified in sub-section (1) shall be
allowed in computing the total income in respect of the
initial assessment year and seven assessment years
immediately succeeding the initial assessment year or until
the interest referred to in sub-section (1) is paid by the
assessee in full, whichever is earlier.
(3) For the purposes of this section,-
(a) "approved charitable institution" means an institution
specified in, or, as the case may be, an institution
established for charitable purposes and approved by the
prescribed authority under clause (23C) of section 10 or an
institution referred to in clause (a) of sub-section (2) of
section 80G;
(b) "financial institution" means a banking company to which
the Banking Regulation Act, 1949 (10 of 1949) applies
(including any bank or banking institution referred to in
section 51 of that Act); or any other financial institution
which the Central Government may, by notification in the
Official Gazette, specify in this behalf;
(c) "higher education" means any course of study pursued
after passing the Senior Secondary Examination or its
equivalent from any school, board or university recognised
by the Central Government or State Government or local
authority or by any other authority authorised by the
Central Government or State Government or local authority to
do so;
(d) "initial assessment year" means the assessment year
relevant to the previous year, in which the assessee starts
paying the interest on the loan;
(e) "relative", in relation to an individual, means the
spouse and children of that individual or the student for
whom the individual is the legal guardian.