When calculating your total income as an individual, you can calculate the tax deduction under Section 80E as per the provisions under this section. If you have repaid a certain amount of the loan in the previous year, the total interest amount in that year will be deducted from your taxable income.
Since there is no minimum or maximum 80E deduction limit, you can claim the deduction on the interest repaid as per the loan repayment schedule for every year. If you repay the loan in the next 8 years, you can claim the deduction for each of those years.
For example, you have a total income of ₹6 lakhs per year, which is also your taxable income, and have availed of an education loan. When you start repaying the loan yearly, the interest amount comes to ₹1 lakh.
When you avail of the Section 80E deduction, ₹1 lakh will be deducted from your taxable income of ₹6 lakhs. This will bring your taxable income to ₹5 lakhs, and then you will have to pay a reduced amount of tax as your tax slab will be lowered.