Thanks for the response. I have a question on how the interest part is calculated. Below is an excerpt taken from section 80E:

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 interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education [or for the purpose of higher education of his relative].

Let's assume, at any point I have a total of Rs. 3 lakhs outstanding out of which Rs. 2 lakhs is principal and Rs. 1 lakh is interest. If I make a payment of Rs. 30,000 at this point, how will the interest portion of this payment be calculated? WIll it simply be in the same ratio as the principal and interest, i.e. will it simply be Rs. 20,000 principal and Rs. 10,000 interest? Please let me know if it is calculated any differently. Also, if different banks do it differently. Thanks in advance.

The referral to "lakhs" and "Rs" clearly shows this question refers to the Indian tax system.

This forum deals exclusively with the taxes within the United States.

Suggest you post your question to http://mytaxes.in/