Whoever's name is on the education loan is whoever gets to deduct its interest — never whoever actually repays it, and never whoever has the bigger Indian tax bill. That is set the day the loan is signed and cannot be moved afterward, so it is worth getting right before signing, not after. Nothing you enter below reaches any server.
The entire interest paid in the year is deductible from taxable income, with no monetary cap. Nothing about the loan size, the institution's location, or the course fees limits the amount — only the actual interest paid limits it. The principal repayment carries no deduction under this section at all; conflating it with the principal-and-interest caps of other sections is the most common way this benefit gets under-claimed.
The deduction runs for the assessment year in which interest repayment first begins, plus the seven assessment years immediately after — eight in total — or until the interest is fully repaid, whichever comes first. A loan taken years before repayment starts does not lose any of this window; the clock starts only when the first interest payment falls due. Once the eight years pass, no further interest on the same loan is deductible even if a balance remains.
Only the individual who is the borrower of record — the person named on the loan agreement — may claim this deduction, and only if the loan funded higher education for that same person, their spouse, their children, or a student for whom they are the legal guardian. A family that repays the loan together, or where a parent services a loan legally taken in the child's name (or the reverse), cannot shift the claim to whichever household member actually has the larger Indian tax bill: the claim follows the name on the loan, full stop. This is set at signing and cannot be corrected afterward by paperwork.
The loan must come from a bank, a financial institution notified for this purpose, or an approved charitable institution. A loan from relatives, friends, or an unlisted private lender is not eligible for this deduction at all, regardless of the interest actually paid on it.
"Higher education" for this section means any course of study pursued after passing the Senior Secondary Examination (Class 12) or its equivalent, including vocational courses — it is not limited to a fixed list of degrees or fields. The institution may be in India or outside it; there is no requirement that the education happen domestically.
We already computed the public version — it is complete and stays free. Add the loan once and the Square tracks the eight-year window for you: Join DesiSquare and the Square remembers your dates, re-runs this when the rules change, and puts a credentialed human one message away.