INCOME TAX11 Sept 2026
Education loans: Parent or student — who should sign on the dotted line? | Mint
Should an education loan sit in the parent's name or the student's? Unlike normal consumer debt, lenders here weigh the student's future earning capacity, not just current income. That changes who should sign. The Income-tax Act offers relief under the old regime for loans covering your spouse, children, or a student you are legal guardian for. So choose the borrower, then plan repayment.
Key Statutory Highlights
- Unlike traditional consumer debt, education loans judge a candidate's future earning capacity rather than just existing income.
- Families often overlook a key structural decision: whether the main loan should be held in the parent's name or the student's name.
- The Income-tax Act offers targeted tax relief under the Old Tax Regime for loans taken for the higher education of the taxpayer, their spouse, their children, or a student for whom they are legal guardian.
Actionable Advice for Taxpayers / Founders:Before the loan is signed, work out whether the parent or the student should be the main borrower, and ask a tax professional whether your interest qualifies for relief under the old tax regime, since that depends on your own facts.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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