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75. Deduction of interest on loan taken for higher education
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75. Deduction of interest on loan taken for higher education.—(1) A person, being an individual, shall be allowed a deduction in respect of any amount paid by him in the financial year by way of interest on loan taken by him from any financial institution for the purpose of—
(a) pursuing his higher education ; or
(b) higher education of his relatives.
(2) The deduction specified in sub-section (1) shall be allowed in the initial financial year and seven financial years immediately succeeding the initial financial year or until the interest referred to in sub-section (1) is paid by the person in full, whichever is earlier.
(3) In this section—
(a) "financial institution" means a banking company or any other financial institution which the Central Government may, by notification, specify in this behalf ;
(b) "higher education" means any course of study pursued after passing the senior secondary examination, or its equivalent, conducted by any board, or university, recognised by the Central or State Government or any authority authorised by the Government so to do ;
(c) "initial financial year" means the financial year in which the person begins to pay the interest on the loan ;
(d) "relative" means—
(i) spouse of the individual ;
(ii) child of the individual ; or
(iii) a student for whom the individual is the legal guardian.
Clause 75 provides that a person being an individual, would be allowed a deduction of any amount of interest paid on a loan taken by him from any financial institution for financing the higher education of himself or of his relatives.
Sub-clause (2) of the said clause provides that the deduction shall be allowed for eight years beginning from the initial year of repayment of interest or till the interest is repaid in full, whichever is earlier.
Sub-clause (3) of the said clause provides the definitions of certain expressions used in the clause like, "financial institution", "higher education", etc. It clarifies that the term relative means the spouse and the child of the individual and also a student for whom the individual is the legal guardian.
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