Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether interest paid on bank loans qualifies for the tax credit under section 118.62 (i.e., the taxpayers obtained bank loans as they do not qualify for student loans under government assistance programs)
Position TAKEN:
No.
Reasons FOR POSITION TAKEN:
The loans are not made under any of the statutes described in section 118.62.
xxxxxxxxxx 5-992196
M. Azzi September 8, 1999
Dear Sir:
Re: Interest on Student Loans
This is in reply to your letter of August 5, 1999, regarding the tax credit for interest on student loans. You express concern as your two children do not qualify for student loans under government assistance programs and, as a result, they have obtained bank loans for their university education, but cannot claim the interest paid on the bank loans.
The tax credit in respect of interest on student loans is contained in section 118.62 of the Income Tax Act (the "Act") One of the specific requirements of this provision is that the interest must have been paid "on a loan made to, or other amount owing by, the individual under the Canada Student Loans Act, the Canada Student Financial Assistance Act or a law of a province governing the granting of financial assistance to students at the post-secondary school level". Accordingly, interest paid on loans that are not made under any of the statutes described in section 118.62 does not qualify for this tax credit.
Please note that Revenue Canada does not write or amend legislation; the function of Revenue Canada is to administer and enforce the laws set out in the Act. The concerns raised in your letter relate to tax policy, which is the responsibility of the Department of Finance. If you wish to pursue the tax policy concerns further, you may direct your enquiry to:
Department of Finance
Tax Policy Branch
L'Esplanade Laurier
140 O'Connor Street
Ottawa, Ontario
K1A 0G5
We trust that these comments will be of assistance.
Yours truly,
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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