Know about the loans that give you tax benefit
Whether you have availed of a loan or willing to avail one, but it is for sure that if you are here, it means you are quite curious to save your pocket. Well, no worries, we’ll not let you feel regret at all as that is what we are going to state today in this particular post. Let’s get started!
Tax Benefits on Loans in India
So, there are different tax benefits for different sorts of loans in India. These range from education loans, home loans, to personal loans. Some loans do not have any tax advantages while some offer a tax exemption.
Let's throw light on all these 3 important loans that qualify for a tax benefit in accordance with the provisions of the Income Tax Act, 1961!
- Starting from an education loan. So, an education loan facilitates you not only to fund your foreign studies but can also halt your tons of tax.
- If you've already availed of an education loan and paying off the same, the interest paid thereon education loan is entitled to be treated as a deduction from the entire income under Section 80E.
- Nonetheless, the deduction is given just for the interest portion of the EMI. There is no tax break for the principal portion of the EMI.
- To claim this tax benefit on an education loan, you must be an individual as HUF or other taxpayers are not eligible for this tax benefit.
- The loan should have been availed for overseas education.
- If you are a parent, you can easily claim this tax benefit for the loan taken for the higher education of your children.
Moreover, if you have not availed of an education loan then no worries, you can still get the best deal on an education loan from Afinoz.
All you need to do is download the Afinoz instant loan app from the Play Store, key in your requirements, compare offers of over 30 lenders, choose a certain offer, and utilize the amount.
- If you already possess an existing home loan or have availed of a home loan in recent times, there are a few tax advantages that you can avail of on the equated monthly installments (EMIs) paid.
- There are additional tax benefits that were declared in the previous budgets that are still applicable for the financial year 2020-21.
- Overall, all home loan related tax benefits put together can assist you to get a maximum tax benefit of Rs. 5 lakhs (Rs. 2 lakhs under section 24, Rs. 1.5 lakhs under section 80C, and Rs. 1.5 lakhs under section 80EEA) just in case it fulfills the required conditions.
- So, if you're planning to shop for a new house, you can plan your borrowing in such a way that your loan facilitates you to get the maximum benefits.
If you have a personal loan then on that too you are eligible for tax exemption.
You must have availed of the loan for business purposes.
To understand comprehensively, if you get the personal loan for the purpose of:
- Investment in Business
- Investment to Purchase/Construction a Residential Property
- Investment in Assets
Moreover, personal finance doesn't offer any sort of tax rebate to customers.
Note: You must remember that the tax benefit stays applicable only on the interest segment and not on the principal loan amount. If the personal loan has been applied for any cause besides the aforementioned causes, no tax advantages can be claimed on the personal loan.
Seeking Best Loan Deals! Here is the Solution!
If you are seeking loans to fulfill your needs or confront your emergency financial crunch, simply calm down, there is no need to worry as Afinoz is here to facilitate you out. You can get the best deals on personal loans, home loans, business loans, and many more.
All you need is to get the Afinoz loan app on your smartphone, enter your details and requirements, compare offers, select the best deal as per your requirement and eventually apply for the one.
The Final Stroke
To conclude, the above-listed loans are the most popular loan types prevalent within the Indian financial space that is linked with tax benefits. Yet, it is always wise to get into an in-depth study of multiple tax exemptions that you may be eligible for prior to availing of a certain of any sort of finance.
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