Over the years education costs have been on the rise, be it for secondary education or higher education. To finance it, most people nowadays opt for an education loan. Against such costs, income tax benefit under Section 80E of the Income Tax Act (ITA) can also be availed. In India, for up to two children you are eligible to claim a tax deduction for tuition fees paid to any university, college or other educational institution. Experts suggest an individual should be aware of the various tax deductions and exemptions available under the I-T Act while computing their tax liability during a financial year. If you have also availed an education loan, find out how you can avail tax benefits on that loan. Tax benefits on interest paid on education loan: Firstly, if you have taken an education loan, you can avail tax benefits on the interest paid under Section 80E. You can avail this benefit for yourself, your children, your spouse and also in case if you are a legal guardian of any child. Deductions under 80E of the I-T Act allows one to take the benefit of tax deduction on repayment of interest for up to 8 years in a row starting from the year in which interest payment began. However, note that the deduction is allowable only on payment basis. Moreover, there is no restrictions as to the quantum of deduction and the course for which the education loan is taken can be either part-time or full-time. Also, the deduction can be availed for education anywhere in the world. However, to be eligible to claim this deduction, the loan taken has to be from any financial institution such as a bank or any other banking institution approved by the government. Payment of tuition fee of children: Unlike the tax benefits on interest paid for tuition fee, the overall claim is restricted to Rs 1.50 lakh in a year. For claiming tax benefit against tuition fee, the course for which the education loan is taken has to be full-time education of a maximum of two of your children in India. Also, to avail the tax benefit for tuitions, the educational institution has to be situated in India, unlike in respect of interest payment for a loan which can be for education anywhere in the world. Additional exempt allowance for the salaried: The above benefits can be availed both by the salaried and self-employed. However, in addition, a salaried can also avail certain allowances received from their employer which are fully exempt. The education allowance received from an employer up to Rs 100 per month each for two of your child is exempted along with hostel allowance which is Rs 300 for each child for up to two children. Note that, these claims can only be exempted if your employer provides you such allowance as part of your salary.