The personal loan segment is likely to grow at a rate of 10% till the financial year of 2025. Due to the borrower-friendly benefits of this loan, including quick disbursal and restriction-free usage, the growth of this uncredited loan has been on the rise. One must know about the income tax benefit on personal loan before applying for it. It can help them claim the deduction while preparing the income tax return file at the end of any financial year. It would help to maximize the savings of the borrower.
Here are some pointers on the income tax benefit on personal loans. While investing in any residential property If the borrower wants to use the funds of personal loans on the construction or purchase of any residential property, they can avail benefits of income tax deduction. In this way, the individual can claim various tax benefits on the interest rates under the section of the IT Act. Moreover, the borrowers can claim up to Rs.2 lakh for any self-occupied property. To claim this kind of exception, the borrower must have the lender's certification. While investing in any asset Borrowers can also save a lot on tax payment if they diverge the personal loan towards any investment in assets. If the borrowers meet any stock investment, non-residential properties or jewelry, it will add the interest paid to the asset's acquisition cost. It will help to reduce the capital gain on the particular asset if it is considered for resale. However, one cannot claim the tax deduction on the payable interest rates for personal loans in the same year of asset procurement. Moreover, there are other hosts of benefits that the personal loan offers. Some of these are:
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |