The personal loan is one of the most applied financial solutions that many people apply for. It is because it is an unsecured solution, and you don’t have to keep any collateral.
What’s more, leading lenders approve the loan request swiftly if you are the right candidate and even disburse the money faster.
If your CIBIL score is strong and you have been consistently employed, you can get the quick approval for a large amount.
But did you know that you can also enjoy tax benefits on personal loans?
Yes, you can avail tax benefit on personal loans the way you use the loan money. Read on and explore more!
Using the loan money purchasing or building a residential property
If you wish to use the personal loan money for buying a residential property, then section 24 of the IT Act lets you pocket tax benefits. The advantage also includes if you use the loan money for home renovation. In turn, a tax deduction of up to Rs.2 lakh is available on a self-occupied home. There is no cap as such if your home is rented.
Using the loan amount for buying any other asset
If you want to use the personal loan figure for buying an asset, you can enjoy tax deductions on the debt’s interest charges. But you can’t avail tax benefits on personal loans in the same financial year. And it is added to the cost of acquisition. You get to claim tax benefits upon selling the assets. In the context, the increased acquisition cost reduces the capital gains.
By using your loan amount via the discussed ways, you can avail tax benefit on personal loans easily.
Bajaj Finserv brings to you pre-approved personal loan offers, home loans and more. It can simplify your loan processing and make it less time-consuming.
You can check out your pre-approved loan offers today after sharing your primary details like the name and the mobile number.