So now in case you have a loan of Rs. 7,10,000 (or above), interest @ 10%pa (diminishing balance) & the repayment is done in 7 years (using EMI), then the net deduction will be more than what was allowed earlier.
In this situation (Rs. 7,10,00 loan @ 10%), the total interest deductible over 7 years (max period allowed for deduction) will be Rs. 2,80,088 (as against 2,80,000 earlier) and this deduction will obviously increase with increase in loan amount (coz interest will increase)
However, for loan amounts lower than this (which is the case in majority of the education loans in India), the students will get lower deduction from the earlier one!!!
I guess we'll have to wait from clarifications from the government - specially in regards to the upper limit (as in busget he said that the limit stays)!!!
P.S. - In case of the education loan which I have taken, the deduction will go down to Rs. 1,49,161.00 from Rs. 2,80,000 (marginal tax burden of Rs. 5,600 per annum)
P.S. - In case of the education loan which I have taken, the deduction will go down to Rs. 1,49,161.00 from Rs. 2,80,000 (marginal tax burden of Rs. 5,600 per annum)
