Tax benefit on Educational loan on past years interest generated

Q & A ForumCategory: Home Loans & CreditTax benefit on Educational loan on past years interest generated
Vikram S asked 8 years ago
Hi Sree, Hope you are doing well. I have a query on education loan and requesting your help on this. Please find my scenario below. The figures mentioned below are not exactly true and only for reference purpose of our discussion. I took an educational loan in 2008 and my course completed in 2012. Followed by that, I enjoyed a holiday period for 1 year and started to repay the loan from 2014 onwards. In 2014, I paid 50K. And out of this 50K, I claimed the interest amount of 20K as a tax benefit under 80E and remaining 30K went towards principal repayment and hence no tax benefit on principal repayment. Then I didn't pay any amount to the bank in 2015 and in 2016 and due to this, my pending amount increased to 3 lakhs. Now on 30th of May month 2017, I paid 2.9 lakhs as a lump sum to the bank. So, I have only pending 10K rupees to close my loan account. Yesterday, I approached my bank to get the provisional certificate to claim the tax benefit for the interest part out of my total amount paid of rupees 2.9 lakhs. But I am surprised to see the statement. In the statement, they have mentioned below. "Total amount paid towards repayment of the loan during the current financial year so far from 01/04/2017 till date 12/01/2018  is Rs. 2.9 Lakhs"   "Total amount of interest charged and to be charged on the loan A/c for the current financial year from 01/04/2017 till 31/03/2018  is Rs. 8K" After seeing this, I drilled down further to see how come the interest benefit for the tax is so less though I paid 2.9 lakhs from my current financial year earnings. Then I realized the break up for that interest amount 8K is as follows (for April month the interest was 3600, for May month it was 3800, and for Jun month it is only 50 rupees as I have repaid everything on may month itself. And for July month the interest was 51 rupees and so on). So, in a cumulative, my total interest charged to my account is 8K for the current financial year. But in a realistic scenario, out of 2.9K which I paid, I am sure a huge amount should go to interest. So, how to claim the tax benefit for a huge interest amount out of this 2.9Lakhs. Though the interest charged to the current financial year is 8K, I have paid the pending interest amount for 2015 and 2016 on 2017 from the current year earnings. Thank you.
1 Answers
Sreekanth Staff answered 8 years ago
Hi, Is this a fixed rate or floating rate loan? Kindly note that the interest paid for the previous years can not be in the present AY. Were there any penalties levied for non-payment of loan EMIs for two years?? Suggest you to key in your loan details in any of the Loan Amortization calculators available online and you can actually find out the total interest paid during the repayment period. For ex :  https://emicalculator.net/ http://www.naveen.info/how-to-calculate-emi-download-excel-emi-calculator/291/  
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