The government has extended the tax concession on interest paid for educational loans to all streams of studies including vocational courses, benefiting students from all economic strata opting for higher studies, from this academic session.
The concession was till now restricted for graduate and post-graduate courses in engineering, medicine, management and post-graduate courses in applied sciences or pure sciences including mathematics and statistics.
“The latest amendment in Section 80E of the I-T Act will bring all the streams of education (apart from regular ones) and vocational courses under its ambit. This will benefit the students who apply for graduate and postgraduate courses in various streams during the upcoming academic session,” a senior Finance Ministry official said.
It will help all such students who take up vocational courses and studies in streams of arts and commerce.
The new arrangement will help students who take loans for studies during assessment year 2010-11 and subsequent years, the official said. With the amendment in Section 80E (deduction allowed in respect of interest on loans taken for pursuing higher education) of the Income Tax Act, the new clause will “extend its scope to cover all fields of studies (including vocational studies) 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.” The I-T concession on such a loan will also be extended to parents who have legally adopted a child. “This will encourage parents to adopt a child without worrying for the expenses of the child’s studies. An individual can take a loan under this category for his or her spouse or children, too,” the official said.