FREE CALCULATOR
Education Loan 80E Tax Benefit Calculator
Section 80E, now Section 129 of the Income-tax Act, 2025, lets you deduct every rupee of education loan interest for up to 8 years. See what that is worth at your slab, and whether it beats the new regime.
- No rupee cap: the whole year’s interest is deductible, but only interest, never principal.
- Old tax regime only. Under the new regime, the default for most salaried taxpayers, the deduction is zero.
- The 8-year window starts the year you begin paying interest, so interest after year 8 gets nothing.
₹15.00 L
7 yrs · 84 mo
1 yr
30 yrs
These are what separate the rate you are quoted from the rate you actually pay. Every figure here feeds the effective APR.
₹7,500 fee + ₹1,350 GST = ₹8,850
Optional. Typically ₹30,000–₹2,00,000, financed into the loan.
Live Cost Breakdown
Monthly instalment (EMI)
₹24,516/mo
for 84 months (7 yrs)
Effective APR
9.69%
19 bps above the 9.5% quoted
Where every ₹100 goes
Total outflow ₹20.68 L
Principal
- 72.5%₹15.00 L
Interest
- 27.0%₹5.59 L
Fees & insurance
- 0.4%₹8,850
You repay ₹1.38 for every ₹1 you borrow.
Total interest
₹5.59 L
over 7 yrs
Upfront charges
₹8,850
paid before disbursal
Tax saved
₹1.68 L
Section 129 (formerly 80E)
Real cost
₹16.78 L
in today's ₹ at 6% inflation
Ways to finish sooner
1 extra EMI a year
Pay one extra ₹24,515.97 every twelve months
Saves
₹54,558
Finishes 8 mo early · +₹24,516 in year 1
5% step-up each year
Raise your EMI 5% at every annual appraisal
Saves
₹59,223
Finishes 1 yr early
Round the EMI up
Pay ₹25,000 instead of ₹24,515.97
Saves
₹16,466
Finishes 2 mo early · +₹5,808 in year 1
Simulated on the loan above. RBI bars lenders from charging foreclosure or prepayment penalties on floating-rate loans to individual borrowers.
Tax savings breakdown
Section 129 — interest
- ₹1.68 L
Average a year
- ₹23,972
uncapped, first 8 years
at the 30% slab
Principal
Interest
Estimates for a education loan, for illustration only. Actual EMI, charges and tax treatment depend on your lender's sanction terms and your own tax position. Confirm the figures on your Key Facts Statement before you sign.
Tax Saved Over the 8-Year Window
| Loan & rate | Interest in 8 years | Saved at 20% slab | Saved at 30% slab |
|---|---|---|---|
| ₹10 lakh @ 10% | ₹5,55,029 | ₹1,15,446 | ₹1,73,169 |
| ₹20 lakh @ 10% | ₹11,10,058 | ₹2,30,892 | ₹3,46,338 |
| ₹40 lakh @ 10% | ₹22,20,116 | ₹4,61,784 | ₹6,92,676 |
| ₹60 lakh @ 10% | ₹33,30,174 | ₹6,92,676 | ₹10,39,014 |
10-year repayment at 10% p.a., EMIs starting in year 1 of the window. Tax saved includes 4% cess and assumes the borrower stays in the same slab for all 8 years. Old regime only.
What Decides Your Deduction
Tax regime — the deduction exists only under the old regime. If you file under the new regime it is worth nothing, however much interest you pay.
Who the borrower is — it goes to the individual who took the loan and pays the interest, for their own, their spouse’s or their children’s higher education, or a student they are legal guardian of.
The lender — the loan must come from a bank, financial institution or approved charitable institution. Money borrowed from family or friends does not qualify.
Interest only — principal repayments get no deduction under this section.
The 8-year clock — it starts in the year you start paying interest and runs for 8 years or until the interest is paid off, whichever comes first.
Your slab — the saving is the deduction times your marginal tax rate, plus 4% cess.
Getting the Most From the Deduction
Compare both regimes every year. If this deduction plus your other old-regime deductions does not beat the new regime’s lower rates, it saves you nothing.
Keep the lender’s interest certificate for every financial year. It splits interest from principal, and that is what you claim.
Do not stretch the tenure past 8 years for the tax break: interest paid after year 8 gets no deduction.
Paying simple interest during the moratorium stops it compounding into your principal, and some banks cut the rate for it. That interest is deductible too, but it also starts the 8-year window.
Frequently Asked Questions
What is Section 80E?
Section 80E of the Income-tax Act, 1961 let an individual deduct the entire interest paid on an education loan, with no upper limit, for up to 8 years. Under the Income-tax Act, 2025 the same deduction is Section 129. It applies only under the old tax regime.
Can I claim 80E under the new tax regime?
No. The education loan interest deduction (Section 129, formerly 80E) is only available under the old tax regime. Under the new regime you get lower slab rates instead, so compare the two each year before you file.
How much tax can I save on a ₹20 lakh education loan?
On ₹20 lakh at 10% repaid over 10 years, about ₹11,10,058 of interest falls in the first 8 years. Deducting it saves about ₹3,46,338 at the 30% slab or ₹2,30,892 at 20%, including cess, under the old regime.
Can parents claim 80E on a child’s education loan?
Yes, if the parent is the one who took the loan for the child’s higher education and pays the interest. If the loan is in the student’s name, the student claims it once they repay from their own taxable income. The same interest cannot be claimed twice.
Is there a limit on the 80E deduction?
There is no rupee limit: the full interest paid in the year is deductible. The limit is time: 8 years from the year you start paying interest, or until the interest is fully paid, whichever is sooner.