Under section 129 of the Income-tax Act, 2025, the deduction in respect of interest paid on a loan…

Section 129 of the Income-tax Act, 2025 (formerly s.80E of the Income-tax Act, 1961) allows an individual a deduction of the amount paid as interest during the tax year, out of his income chargeable to tax, on a loan taken from a financial institution or an approved charitable institution for pursuing the higher education of himself or his relative. No monetary ceiling is prescribed, so the whole interest is deductible, for the initial tax year and the seven immediately succeeding tax years or until the interest is fully paid, whichever is earlier. The deduction is not available to an individual taxed under the default new tax regime of section 202(1) unless he opts out under section 202(4). The amounts of ₹ 10,000, ₹ 15,000 and ₹ 20,000 are not limits under this section.