Education Loan from Friends? No Tax Benefits Under Section 80E

• Section 80E of the Income Tax Act allows deduction for interest paid on education loans for self, spouse, or children's higher education.
• The deduction is available for eight consecutive years from the start of interest payment and applies only to interest, not the principal amount.
• Crucially, Section 80E benefits are only for loans taken from financial institutions or approved charitable institutions.
• Education loans borrowed from friends or relatives do not qualify for tax deductions under Section 80E, unlike some home loan provisions.
• This deduction is applicable only under the old tax regime, and joint borrowers can also claim it.

Why It Matters: Education loans from friends do not qualify for tax deductions under Section 80E of the Income Tax Act.