Know How Personal Loan Can Affect Your Tax Benefits
If you have different financial needs to cover, then you don’t need to worry and liquidate your assets and savings. It is because you can always apply for the online personal loan to cover your needs.
Other than the higher loan amount, quick approvals and money disbursements, you can also enjoy tax benefit on personal loans. But it is only available via the way you use the personal loan money. Read on and know more!
- When you use the amount for business expansions
You can claim tax benefit on personal loans (tax deductions for interest paid) on the loan repayments. But this is only available only if you use the money to increase the revenue of the business.
2. When you use the amount for home renovation
As per section 24 (b) of the Income Tax Act, 1961, you can enjoy tax deductions if you use the money for home renovations. The interest paid on the repayment of the loan up to Rs.30,000 can be claimed as deduction from the entire taxable income. If it is for a residential home buying then up to Rs.2 lakh deduction is allowed for the paid interest.
3. When you use the amount for buying other assets
If you invest the money for buying any non-residential home property, jewellery, gold, shares, you can take advantage of tax exemptions on a personal loan. The interest paid on the same is taken as the cost of asset acquisition.
Other than these aspects, the money out of the personal loan can’t be used for any tax benefits. Being aware of the tax benefit on personal loan may now help you enjoy deductions.
Bajaj Finserv offers pre-approved personal loan offers, home loans, business loans and more. It is to simplify your loan processing.
You can explore your pre-approved loan offers today after sharing your basic details such as your name and mobile number.
