Important: Prodigy Finance does not provide tax benefits or tax advice. The calculator is for informational and estimation purposes only. Always direct customers to a qualified tax advisor for personal tax guidance.
What is this calculator and what does it do?
It's a free estimation tool for Indian borrowers. You enter the annual interest you've paid on your education loan, your tax slab, and whether you're on the Old or New Regime — and the calculator estimates how much you could save on your tax bill under Section 80E of the Income Tax Act, 1961.
It also shows your effective interest cost after the tax saving, so you get a clearer picture of what borrowing actually costs you once the deduction is factored in.
It's for planning purposes only — it doesn't file your taxes or guarantee any saving.
What is Section 80E?
Section 80E is a provision in India's Income Tax Act, 1961 that allows eligible borrowers to claim a tax deduction on the interest paid on an education loan taken for higher education.
A few key points:
• The deduction applies only to the interest component of your repayment, not the principal.
• There's no upper limit on the amount of interest you can claim.
• The benefit is available for up to 8 years from the start of repayment.
• It can be claimed by the borrower, or by a parent, spouse, or legal guardian who took the loan.
Is the calculator free to use?
Yes, completely free. You don't need to create an account or log in. You can run as many scenarios as you like with no cost and no commitment.
Does the calculator guarantee that I'll receive the tax saving it shows?
No. The result is an estimate based on the figures you enter. Whether you're actually eligible for Section 80E — and how much you can claim — depends on your individual tax situation, the type of loan, and the lender.
For confirmation of what you're entitled to claim, please speak with a qualified tax advisor or chartered accountant.
Which tax regime should I select — Old or New?
The Section 80E deduction is only available under the Old Tax Regime. If you have already opted into the New Regime, you cannot claim this deduction.
If you're unsure which regime applies to you, your employer's payslip or Form 16 will usually confirm it. A tax advisor can help if you're not certain.
What is the Health & Education Cess, and should I include it?
Health & Education Cess is an additional 4% charge applied on top of your income tax liability in India. Including it in the calculator gives you a slightly more accurate picture of your total tax, and therefore your total saving.
We'd recommend leaving the checkbox ticked unless you have a specific reason not to include it.
Is there a maximum limit on how much interest I can deduct under Section 80E?
No — there's no upper cap. You can claim the full amount of interest paid in a given year, regardless of the size of the loan. This makes Section 80E particularly valuable for larger education loans.
Bear in mind the deduction is on interest only, not the principal repayment.
For how many years can I claim the Section 80E deduction?
Up to 8 years from the year you first start repaying the loan — or until the interest is fully repaid, whichever comes first. If you repay the loan in under 8 years, the benefit stops when repayment ends.
The calculator's Repayment Year input lets you see how the saving changes year on year as your outstanding balance reduces.
Can a parent or co-borrower also claim the tax benefit?
Yes. Section 80E allows the deduction to be claimed by the borrower or by a parent, spouse, or legal guardian who took the loan on the student's behalf. However, only one person can claim the deduction for the same interest payment — it can't be split or claimed twice.
Both parties should confirm their individual eligibility with a tax advisor.
Does using this calculator start a loan application or affect my credit score?
No. Using the calculator has no effect on your credit file and doesn't create any obligation. It's a standalone planning tool.
If you'd like to apply for a Prodigy Finance loan after exploring your numbers, you can do that separately through the application form on our website.
Does the calculator guarantee that my loan will be approved?
No. The calculator is only for estimating tax savings — it has nothing to do with loan eligibility or approval. Loan decisions are made separately, based on a full assessment of your financial profile.
If you'd like to understand your loan options, please start an application or speak with our team.