Interest on loan taken for higher education eligible for deduction for eight years

Jul 30 2013, 14:56 IST
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SummaryIndividuals who acquired listed shares under the Rajiv Gandhi Equity Savings Scheme are eligible for a tax deduction from FY13.

Hiten Kotak

I acquired listed shares under the Rajiv Gandhi Equity Savings Scheme during FY13. What is the deduction available?

— Rohit Rao

Individuals who acquired listed shares under the Rajiv Gandhi Equity Savings Scheme are eligible for a tax deduction from FY13. The quantum of deduction available is 50% of the amount invested subject to a maximum of R25,000. However, it is important to note that the deduction in FY13 is available only if your total income is up to R10 lakh.

What is amount of deduction on interest from savings bank account?

— Chanchal Verma

As per Section 80TTA of the Income-Tax Act, 1961, deduction for interest on savings bank account is available up to R10,000. Any bank interest earned over and above R10,000 is taxable.

Is there any deduction available for interest earned on fixed deposits?

— Ankur Garg

No, interest earned on fixed deposits is fully taxable. It could be possible that your bank has deducted TDS of 10%. In such a case, you will need to discharge the balance taxes as self-assessment tax.

Can I claim HRA exemption in my tax return if I have not submitted rent receipts to my employer?

—Naresh Gupta

Yes, HRA exemption can be claimed at the time of filing the return even if it is not claimed earlier. It is advisable that the proof of payment of rent be retained for future reference. This could help in case your return is picked for tax-assessment.

I have taken an education loan for higher studies. Am I eligible for any deduction?

— Anupam Singh

Yes, interest paid on loan taken for pursuing higher education is eligible for deduction for eight successive years, beginning with the year in which payment of interest is first made. There is no limit for the amount up to which the deduction is available. The deduction can be availed even if the loan is taken for higher education of a specified relative.

Can I claim deductions even if they are not reflecting in my Form 16?

— Saurabh Saxena

Yes, you can claim all those deductions for which you are eligible even if these deductions are not reflecting in Form 16. However, you should keep all the proofs of investments made in respect of which you are claiming deductions.

The writer is a co-head of Tax, KPMG

Send your queries at fepersonalfinance@expressindia.com

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