Quick Information on Tax Rebate on Personal Loan
If you fulfil the personal loan eligibility criteria, then nothing can beat the convenience of a personal loan. Yes, from application to approval time and disbursements, everything is 100% digital and fast.
But other than working as your ‘go-to’ funding solution, personal loans also come with tax benefits. Read on and know more now!
Tax rebate on personal loans at a glance
The way you use your quick personal loan amount may provide you with many tax rebates. Take a look:
- Home improvements
If you have used the money for home improvements, then an amount of Rs.1.5 lakh is entitled to tax deductions. It is as per the Section 80C of the Income Tax Act.
2. Buying or constructing a residential property
If you are using your personal loan money to buy and construct a new residential property, then a maximum deduction of up to Rs.2 lakh is allowed. Section 24 of the Income Tax Act lets you do that.
3. For business investments
If the funds out of a personal loan are used for business purposes, then the interest part could be treated as a business outlay. It can help you reduce your net taxable profits and income tax liability if you happen to be the owner.
4. For purchasing assets
Many people use their personal loan eligibility criteria to get approval for an amount that they can use for buying assets. In this case, the loan can be employed for tax deductions if the funds are used for buying assets. Assets could be non-residential ones such as shares, jewellery and stocks. The loan’s interest part can be added to the acquisition cost of the asset. In turn, it can assist in reducing the capital profits of liquidating the assets.
If you have the personal loan eligibility criteria, then you can get a loan amount of up to Rs.25 lakhs. Also, it is possible to enjoy tax benefits on the way you use the amount.
Must Read: Everything You Should Know About Tax Rebate On Personal Loan
