The Statutory Brief

IT Act 1961 → 2025 / Section 80E

Deductions

Section 80E → Section 129

Deduction for interest on education loan

Section 80E of the old Income-tax Act, 1961 · new section 129 under the Income-tax Act, 2025

New reference Section 129

Income-tax Act, 1961Section 80E

  • Entire interest on a loan for higher education of self, spouse, children or ward
  • From a bank, notified financial institution or approved charity
  • Available for 8 years from the year repayment of interest starts
  • No monetary limit; old regime only

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 129

  • Same deduction, now section 129
  • Initial tax year plus seven following years
  • No upper limit on interest
  • Definitions of higher education, relative and approved institution in 129(3)

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered; conditions and the 8-year period unchanged.

Practice notes

  • Only interest is deductible, not principal.
  • The loan must be in the individual's own name.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the education loan interest deduction under the new Income Tax Act 2025?

Section 129: the entire interest on a higher-education loan, for up to 8 tax years, under the old regime.

What is section 80E called in the new Income-tax Act, 2025?

Section 80E of the Income-tax Act, 1961 corresponds to Section 129 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 80E under the new Income Tax Act?

Renumbered; conditions and the 8-year period unchanged.

Is section 80E still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 80E of the 1961 Act. Section 129 of the 2025 Act applies from tax year 2026-27.

Related sections

80C→123Deduction for life insurance, PF, PPF, ELSS, tuition fees, home-loan principal and other specified savings80D→126Deduction for health insurance premium, preventive health check-up and medical expenditure for senior citizens80G→133Deduction for donations to approved funds and charitable institutions