Under this section, deduction is available for payment of interest on a loan taken for higher education from any financial institution or an approved charitable institution. The loan should be taken for either pursuing a full-time graduate or post-graduate course in engineering, medicine or management, or a post-graduate course in applied science or pure science.
The deduction is available for the first year when the interest is paid and for the subsequent seven years. Up to March 2005, deduction was available for the repayment of principal and interest aggregating to Rs 40,000 a year.
It is deduction in the case of a person with a disability. An individual who is suffering from a permanent disability or mental retardation as specified in the persons with disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999, shall be allowed a deduction of Rs 50,000. In case of severe disability it is Rs. 75,000.
The assessee should furnish a certificate from a medical board constituted by either the Central or the State Government, along with the return of income for the year for which the deduction is claimed.
A person who is suffering from permanent physical disability or mental retardation is entitled to deduction upto Rs. 40,000.
Handicapped must be certified by a physician, surgeon or a psychiatrist, working in a government hospital.
Under section 80DD and 80U of Income Tax Act, physical disability must be one of the following:
1. Permanent or more than 50% disability in limb
2. Permanent or more than 60% disability in 2 or more limb
3. Permanent loss of voice
4. Permanent blindness
5. Mental Retardation in which mental intelligence is less than 50% of normal required intelligence