80E. Deduction in respect of repayment of loan taken for higher education.

(1) In computing the total income of an assessee, being an individual,there shall be deducted, in accordance with and subject to the provisions of this section,any amount paid by him in the previous year, out of his income chargeable to tax, by way of repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan: Provided that the amount which may be so deducted shall not exceed forty thousand rupees.

(2) The deduction specified n sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the loan referred to in sub-section (1) together with interest thereon is paid by the assessee in full, whichever is earlier.

(3) For the purpose of this section, -

(a)"approved charitable institution" means an institution specified in, or, as the case may be, an institution established for charitable purposes and notified by the Central Government under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;

(b)"financial institution" means a banking company to which the Banking Regulation Act,1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette,specify in this behalf;

(c)"higher education" means full-time studies for any graduate or postgraduate course in engineering, medicine, management or for postgraduate course in applied sciences or pure sciences including mathematics and statistics;

(d)"initial assessment year" means the assessment year relevant to the previous year,in which the assessee starts repaying the loan or interest thereon.]