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Guide

Section 80E Tax Benefit

Section 80E allows a deduction for the entire interest paid on an education loan — no cap at all — for up to eight years.

Section 80E deduction on interest
No upper limit

For up to 8 assessment years. Old tax regime only. Interest only, not principal.

as of 2026-08-17· Income Tax Act, Section 80Everified

The two conditions people miss: it is available only under the old tax regime, and only the interest qualifies, never the principal.

By Nishit Kumar, Founder & Editor
Updated 17 August 2026

What to know

The eight-year window runs from the year repayment begins, and it does not restart. On a large overseas loan with a long moratorium, that means the clock is running through your highest-interest years — which is exactly when the deduction is worth most, provided you are on the old regime.

The deduction can be claimed by whoever is actually repaying the loan, whether that is the student or the parent, provided they are the borrower or co-borrower. For a family where the parent has higher taxable income and the student has little, that choice is worth making deliberately at the point of sanction rather than discovering it later.

Your numbers

₹15 L
₹0₹15,00,000₹50 Cr
₹2 L
₹0₹2,00,000₹50 L

Only usable under the old regime.

Tax under the new regime
₹97,500
New regime tax
₹97,500
Old regime tax
₹1,95,000
New regime saves you
₹97,500
Effective tax rate
6.50%
Monthly take-home
₹1,16,875

What this means.The new regime wins here. You would need deductions above roughly ₹5,43,750 for the old regime to catch up.

View the full breakdown (9 rows) →
New regimeOld regime
Gross income₹15,00,000₹15,00,000
Standard deduction₹75,000₹50,000
Other deductions₹0₹2,00,000
Taxable income₹14,25,000₹12,50,000
Tax before rebate₹93,750₹1,87,500
Section 87A rebate₹0₹0
Surcharge₹0₹0
Health & education cess₹3,750₹7,500
Total tax₹97,500₹1,95,000

Questions

Is there a limit on the Section 80E deduction?

No monetary cap on the interest amount. The limit is temporal: up to eight assessment years starting from the year repayment begins, or until the interest is fully repaid, whichever is earlier.

Can I claim 80E under the new tax regime?

No. Section 80E is available only under the old regime. Since the new regime is the default, anyone relying on this deduction needs to actively check which regime they are on.

Who can claim the deduction — the student or the parent?

Whoever is actually repaying, provided they are the borrower or co-borrower on the loan. Where the parent has the higher taxable income, structuring the loan so they can claim is worth deciding at sanction.

Related reading

Sources

Every figure on this page is traced to the document it came from. Where a claim rests on a regulator or an institution’s own rate card, that is the link below — not a summary of it.

  1. [2]Section 80E — deduction for interest on education loan— Income Tax Department, Government of IndiaPrimary
Worth knowing.Rates, fees and terms change frequently and vary by applicant. Everything here is general information, not personalised advice. Confirm the current terms directly with the institution before you apply. How we research and rate.