Clause 68 - Deduction in respect of interest on loan taken for higher education - Direct Taxes Code Bill, 2009

Deduction in respect of interest on loan taken for higher education 68. (1) A person, being an individual, shall be allowed a deduction in respect of any amount actually paid by him in the financial year by way of interest on loan taken by him from any financial institution for the purpose of,- (a) pursuing his higher education; or (b) higher education of his relatives. (2) The deduction specified in sub-section (1) shall be allowed in respect of the initial financial year and seven financial years immediately succeeding the initial financial year or until the interest referred to in sub-section (1) is paid by the person in full, whichever is earlier. (3) For the purposes of this section,- (a) "financial institution" means a banking company or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf; (b) "higher education" means any course of study pursued after passing the senior secondary examination, or its equivalent, conducted by any board, or university, recognised by the Central or State Government or local authority or by any other authority authorised by the Government or local authority to do so; (c) "initial financial year" means the financial year in which the person begins to pay the interest on the loan;and (d) "relative" means,- (i) the spouse of the individual; (ii) the child of the individual; or (iii) the student for whom the individual is the legal guardian.