Everything You Should Know About the Tax Benefits on Personal Loan
Many people count on the personal loan when it comes to a considerable loan amount without pledging collateral. It is because a personal loan is an unsecured debt.
Based on the eligibility and lender’s policies, one can avail a considerable amount to meet many needs.
But did you know you can also enjoy some tax benefits on personal loans?
Yes, you can pocket some tax benefits on personal loans the way you use it.
Do you want to know more? Go through this quick post!
Here’s how you can enjoy tax benefits on personal loans
- When you use the loan money for buying or renovating a property
If you use the loan amount to purchase or renovate a property, you can claim the paid interest from your taxable income. Section 24 (b) of the Income Tax Act lets you enjoy tax benefits. The interest amount of up to Rs.2 lakh could be deducted in the case of a self-owned home. For a rented home, the interest paid on loan is counted for tax benefits. You can avail it if you manage to save relevant documents as proof.
2. When you use the loan amount for business purpose/buying assets
If you wish to invest the loan amount for business purposes or buying assets other than purchasing a property, the paid interest could be added to the cost of acquisition. You can reduce the capital gains and also trim down the tax liability.
If you are able to use the loan amount for the purposes as mentioned, you can surely avail tax benefits on personal loans.
You may not be able to pocket tax benefits on personal loans if you use the money for purposes other than discussed.
If you wish to apply for the personal loan, you should do that after comparing all deals on a third-party website. This way, you can pick the best deal matching your needs and the repayment capacity.
Bajaj Finserv offers pre-approved deals on personal loans, home loans and more to simplify the loan processing and other formalities.
You can share your basic details like name and mobile number to check out your pre-approved loan offers today.
