All you need to know about Tax Benefits on Education Loan Interest Payments

If you have taken an education loan for your post-graduate course then you will find this useful. The timing of this article is also crucial especially for all the aspiring MBA grads who have given their CAT exams and are awaiting results and call from IIMs.  Considering the present and foreseeable cost of education, undertaking a two-year MBA course will involve significant amount of capital investment – ranging from Rs 5 lacs to Rs 30 lacs (including cost of incidental expenses like travelling, hostel accommodation, etc).  Nothing to say about the Masters course pursued abroad.  As a result, majority of the students opt for availing education loans to fulfill their dreams.  Availing an education loan is hassle-free given that the banks are aware of the fact that the rewards post completion of the course would be significant enough to repay their loan amount easily.  However, there is an icing on the cake provided by the Indian Income-tax laws which the students aren’t completely aware of.  I am deliberately stressing upon the term ‘completely’ based on the conversations I have had in the past with many students.  I am talking about the tax benefits that the students can achieve on availing an education loan.  These tax benefits effectively help you to reduce the overall cost of your education loan.