Bengaluru, Dec 2: There is good news in the offing for parents who are planning to send their children abroad for studies.
Soon, they all will get income tax benefits on education loan taken for higher studies of their wards. Reportedly, the Pune Income-tax Appellate Tribunal has allowed the same.
According to a TOI report, Section 80E of the I-T Act has provision with which parents become eligible for claiming deduction of interest paid on the education loan amount.
Speaking about how whole process will work, Parizad Sirwalla,Tax partner, KPMG said, "The only requirement is that such higher education should be undertaken by the student after passing SSE or its equivalent from a recognized institution in India".
Meanwhile, Nitin Santhilal Muthiyan who came for hearing from Pune Tribunal got reply by the Tax payers saying that "The loan tax can only be allowed when his son has completed his higher study from recognised Institution of India".
He was not allowed to avail tax benefit on loan amount as his son was pursuing a course from George Washington University, USA .
Peeved Muthian then filed an appeal with the ITAT which gave a favourable order.
ITAT was quoted by TOI as saying, "Provisions of Section 80E do not contain any stipulation that the higher education should be pursued only in India. If the intent of the legislation was that education should be pursued in India, in order to avail of the interest deduction, it would have stated so.
Further, the taxpayer's son had completed SSE or its equivalent, as is required by this section, before pursuing studies overseas."