How to Claim Tax Benefits on Education Loans Under Section 80E in 2025

Siya, how did you manage your MBA expenses? I’m thinking of applying this year, but the cost is overwhelming.”

“Geeta, I took an education loan, and thank god for Section 80E! I’ve been claiming tax benefits for the last 3 years. You should definitely explore it too.”

Higher education is no longer just a dream; it’s a powerful tool for empowerment, independence, and financial growth, especially for women. But good education can be expensive. That’s why many turn to education loans, and if you’re paying the education loan, Section 80E of the Income Tax Act can offer a big relief. 

This blog breaks down how women can claim tax benefits under Section 80E, save more while repaying education loans, and while choosing the Old Tax Regime

What is Section 80E?

80E is an education loan deduction that allows you to claim the deduction on the “interest component” paid on higher education loans to banks and financial institutions & lowering your tax outgo. This also means the interest  (not the principal) you repay can reduce your taxable income.

Why Does It Matter for Women?

• Aspiring Female Professionals: Women breaking into higher education or professional fields like medicine, engineering, management, or overseas education often take large loans. Section 80E helps manage the financial burden.
  
• Single Mothers & Homemakers Returning to Work: Many women invest in their children’s education or their own second innings; this deduction eases that transition.
  
• Financial Independence: Claiming tax benefits empowers women to be financially aware and independent. Every deduction counts when building your own wealth.
  

Who Can Claim This Deduction?

• Only individuals can claim this deduction ( HUFs or companies cannot claim this deduction)
  
• The loan must be in your name (either as a student or parent).
  
• This deduction is only available in the old Tax regime.
  
• The loan should be taken from a recognised financial institution or a charitable organization.
  
• You can claim this deduction for :
  
  • Yourself
    
  • Your spouse
    
  • Your children
    
  • A student for whom you’re a legal guardian
    

How Long Can You Claim This Deduction?

• You can claim this deduction up to a maximum of 8 years, starting from the year you begin repaying the loan.
  
• Or until the interest is fully paid whichever comes earlier.
  

How Much Can You Claim?

• There is no upper limit on the interest amount for this deduction.
  
• You can claim 100% of the interest paid in a financial year for the education loan
  (Note: You can claim only an interest component for the education loan )
  

Example:
If you paid ₹1.80 lakh as interest in FY 2024-25, you can reduce ₹1.80 lakh from your taxable income under Section 80E, which leads to significant tax savings. (If you are opting for the Old Tax Regime)

How to Claim the Deduction

1. Collect Interest Certificate: Collect an Interest certificate from your Bank/Financial Institution.
   
2. Ensure Loan is for Higher Education: The certificate should clearly separate principal and interest so that it will be easier for you to claim the deduction, since you can consider only the interest component
   
3. File ITR: While filing your Income Tax Return, claim the deduction under “Section 80E“ in the “Deductions” section to claim the benefit.
   
4. Maintain Records: Keep all loan documents and receipts for future reference or queries from the IT department.

Pro Tips for Women Claiming Section 80E

•  If you and your spouse are co-borrowers, both can claim a deduction in proportion to repayment. (but only on the amount each one repays).

Why Should Women Be More Aware of This?

• Better financial planning while investing in or returning to education
• Boosts confidence to take control of finances
• Smart tax planning means more funds to invest in your goals, children, or even retirement
  

Final Words

Education is an investment that pays back for life, and with Section 80E, the government rewards your investment with tax relief. For women, whether you’re pursuing higher studies yourself or funding someone else’s, it’s time to be informed, empowered, and financially smart. 

Start saving for your education goals with Lxme’s expert-curated portfolios to Save smartly.

FAQs

Further read:

• Role of Education in Women Empowerment
• Lxme’s Child Education Plan: An Expert curated portfolio
• Empower Your Child’s Future with Lxme’s Child Education Plan in India