Tax Benefits on Personal Loan – Details About of Two Situations
Taking a personal loan is a very important way for us, by which we can solve all our money problems, such as meeting marriage expense, financing higher studies, etc. Wherever we apply for a personal loan, we expect some tax benefit from it. There are some tax benefits on repayment of personal loans under Indian laws. This article will help you to have the best understanding of tax deduction.
However, the tax benefits are available only on some particular grounds. Let us know to avoid any confusion-
A personal loan is invested to buy of any other asset
Other assets denote shares, machinery, jewelry, etc. In this case, the tax benefit is accepted in the year in which the assets are dols, not when some are bought. In this case, the deduction will be accepted to you on the personal loan interest component. And will not be accepted on repayment of the principal component.
A Personal loan is availed for any business purpose
In this case, if you invest personal loan amount borrowed for any business purpose, then you can claim a tax deduction on the interest portion of your EMIs.
Generally, people get confused with the tax benefits on the loan amount availed for construction/purchase of a residential home. If you want a claim for the tax deduction then you have to give a certificate of interest. Nowadays, in home loan cases, NBFCs and Banks issue interest certificates for all the clients. Interest certificates play an important role in the amount of investing for housing purpose.
Thus, if you are taking a personal loan then you can be sure to claim your tax deduction to save some extra rupees.