section 80e foreign education Loan Interest allowed as deduction
Question: Can the Assessee claim the deduction of interest on education loan under section 80E of Income Tax act 1961 of India, when the loan has been taken for foreign education ?
Answer : For claiming deduction under section 80E, there is no condition that higher education should be in India only
IN THE ITAT PUNE BENCH ‘B’
Nitin Shantilal Muthiyan
v.
Deputy Commissioner of Income-tax-1, Ahmednagar
IT APPEAL NO. 332 (PUNE) OF 2014
[ASSESSMENT YEAR 2009-10]
MAY 15, 2015
FACTS
■ The assessee claimed deduction under section 80E for interest expenditure on loan taken for higher education of his son in Washington, USA.
■ The Assessing Officer disallowed the deduction on the ground that the said deduction was allowable only in case of Indian education institutions duly authorised in India.
■ On appeal, the Commissioner (Appeals) confirmed the order of the Assessing Officer observing that there was no evidence that the assessee’s son was pursuing any higher education.
■ On second appeal:
HELD
■ The Assessing Officer has categorically mentioned in the assessment order that the assessee’s son is taking higher education (MS Electrical Engineering) in Washington, United States of America. The assessee has placed the certificate from University of Pune as well as certificate from the George Washington University which conclusively prove the nature of course, year etc. Therefore, the observation of the Commissioner (Appeals) that the assessee has not even given name or program undertaken by his son and no details are furnished is without any merit. Further, this course definitely cannot be pursued unless a student completes his senior secondary examination or its equivalent. Nowhere the section provides that the higher education should be taken in India only and not abroad. [Para 12]
■ There is no such stipulation under section 80E that the education should be in India only. Had there been such an intention by the legislature, it would have been definitely and specifically mentioned as had been mentioned in section 11 which provides that any income or property held for charitable purposes is exempt from tax under section 11(1)(a) only to the extent it is applied in India. [Para 13]
■ Since the son of the assessee is pursuing his MS Electrical Engineering in Washington, United States of America after completing his Secondary Education examination or its equivalent and since the interest expenditure is not in dispute, the assessee is entitled to get the benefit of deduction under section 80E. [Para 13]