The government has been raising the budgetary allocation every year for education, along with imposing a 3% tax to promote primary and secondary education in the country. It also provides tax breaks for those who pursue higher education.

Various steps have been taken to boost the education sector, keeping in view the need to ensure that Indians should be at par with their global peers in terms of education for the economic growth of the country.

Section 80E of the income tax act has a variety of benefits for students pursuing graduation and post graduation courses in different fields. In the present times, education is one of the most expensive amenities, and forces a huge number of students to take student loans. This section, thus, ensures that any interest paid on these loans is exempt from taxes. There is also no upper limit to the quantum of loan attached, unlike the home loan.

Unlike the home loan, however, an education loan can only be taken for 8 consecutive years and not more than that, and since it is that not the students only but mostly the parents who take this loan, the exemption under this section is extended to the relatives too. It can thus be availed by the parents as well as the spouse.

Further, this tax exemption on education funds is not just limited to the loan bearers, it also extends to parents paying the tuition fees of their children in schools or colleges, on their own without taking a loan. However, there is no separate section for this exemption, and it has been clubbed under the Rs. 1,00,000 limit of section 80C. This exemption is also available only for education in Indian Institutes.