Jigar M. Patel
International Tax Attorney
Deduction for Interest Paid on Two Higher Education Loans
Query: In 2021, I took an education loan of Rs. 50 lakhs at 10% interest per annum for my son’s higher studies in the US for which I am claiming deduction u/s. 80E of the Income-tax Act. My daughter is also planning for higher studies abroad, for which I intend to borrow Rs. 70 lakhs. Can I claim deductions u/s. 80E in respect of the interest payable on both these education loans?
Reply: You have raised an interesting question. Section 80E provides for deduction in respect of interest paid on education loan taken by an individual from any financial institution or approved charitable institution for the purpose of pursuing his own or his relative’s higher education (whether in India or abroad). Starting from the initial year, this deduction is available for seven subsequent assessment years during which such interest is paid. Relative for the purpose of this section incudes spouse and children of the individual.
It is important to note that there is neither any monetary ceiling prescribed for the amount of such deduction or any restriction in regard to the number of beneficiaries for whom such loan can be availed. Therefore, on the facts of your case, you can claim deduction for the entire amount of interest paid by you in respect of both the education loans, for the period as prescribed.
Overseas Travel Medical Insurance tax deductible?
Query: I am traveling with my family to Europe for a holiday this month and have taken an overseas travel insurance policy which assures necessary coverage in case of our medical emergencies and healthcare requirements. Can the premium paid for this insurance be claimed as an eligible deduction u/s. 80D?
Reply: Section 80D grants a deduction of up to Rs. 25,000 (Rs. 50,000 for senior citizens) per financial year on medical insurance premiums paid by a taxpayer. The section no where mentions about the premium being in connection with an insurance policy only within India. The requirement is that the insurer is an IRDA approved agency. Therefore, if the premium paid for the overseas medical insurance is within the overall eligible monetary limit along with any domestic medicare insurance as prescribed under Section 80D, you can claim such deduction.
Tax Benefit for Purchase of Medical Gadget
Query: I am a senior citizen, who does not have any coverage of health insurance. Since I have respiratory problems, my doctor has advised me to keep a respirator machine at home to take care of any health emergency. During FY 2023-24, I invested in this medical gadget spending Rs. 55,000. Can I avail any tax benefit in respect of the same?
Reply: Section 80D grants a deduction in respect of health insurance premia or payment for preventive health check up. Moreover, it also covers within its scope medical expenditure incurred on the health of a senior citizen, in a case where no amount has been paid to effect or keep in force a health insurance for such person. The allowable deduction for such expenditure is a maximum of Rs. 50,000.
The term medical expenditure is wide enough to include not only expenditure for medical treatment by way of charges paid to a doctor or for hospital care, but also expenditure incurred for any medical gadget, as in your case. You can therefore plan to claim the benefit of deduction of Rs.50,000 while filing your income-tax return for assessment year 2024-25, relevant to FY 2023-24.
