I have taken an education loan for my daughter. Can I claim deductions on both the tuition fees and the interest paid on the loan for financial year 2008-09?

Manab Chakraborty, Calcutta

In the case of an education loan, only the interest repayment is deductible under Section 80E of the Income Tax Act. But the deduction is applicable for loans taken for higher education, defined in the act as full-time studies for any graduate or post-graduate course in medicine, engineering, or management, applied sciences or pure sciences. This deduction is available for a maximum period of eight assessment years beginning in the year in which the interest is first paid. So, you can claim deductions under both Section 80C (on tuition fees) and Section 80E if your daughter is pursuing any of the courses mentioned above.

Relief on scholarships

I am pursuing a Ph.D. I am getting a scholarship of Rs 15,000 a month. Shall I have to pay income tax on this scholarship?

Siddhartha Kar, Midnapore

According to section 10(16) of the Income Tax Act, scholarships granted to an individual to meet his or her cost of education shall not be included while computing the previous year’s total income. Therefore, if a person gets a scholarship, no income tax will be payable. The scholarship will be treated as an exempted income.

Not much respite

I am a senior citizen and also a taxpayer. I invested Rs 1 lakh in bank FDs earning an interest rate of 10 per cent. If I take a loan against my FD after one year, what will be the tax liability on the interest income?

Ketaki Saha, Bankura

There is no income tax benefit on loans taken against fixed deposits. A loan taken against a fixed deposit serves as collateral for the loan. You will continue to earn interest on the bank FD. Hence, you will have to calculate the interest income on the fixed deposit for every financial year to calculate your total annual income.

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