Tax rebate on Principal amount of an Education Loan?

Most of us know that the interest paid on an Education Loan can be used for availing tax benefits. But the Principal of an Education Loan can also be used effectively for tax rebate which many tax payers evade without realizing.

Tax Rebate on Interest Paid on an Education Loan:
As per Section 80 (E) of Income Tax Act 1961, as amended by Finance Act 2006, any individual availing education loan for his own study from a recognized financial institution can have the entire interest amount deducted from his/her taxable income.
Conditions for availing the benefits of Section 80 (E):

• The benefit is available only to individual assesses and for their own education.
• The purpose of loan should be to pursue higher education i.e., full time studies in graduate or post graduate course.
• The loan should have been taken from any bank, notified financial institution or an approved charitable institution.
• Only the interest amount is eligible to be deducted and not the principal.
  If the above conditions are satisfied, the entire amount paid by way of interest is deductible from income under Section 80 (E) .
• This deduction is available for next seven succeeding years (or until the interest is being paid) from the initial financial year from which the assessee starts paying the interest on loan.
• The deductions under Section 80 (E) are over and above the deductions under section 80C.
  

Tax Rebate on Principal Paid on an Education Loan:

Tuition fees are tax deductible under Section 80C but not the principal of education loan. No that's not the case for education loans taken for the studies of children.

Tuition fee of children paid out of the borrowed funds, are eligible under Section 80C because the Section no longer insists on the prescribed format of payment being made out of taxable income.
But if the education loan is taken for education of self or spouse, the principal would fall on the other side of tax rebate as Section 80C allows tuition fees only for children.