Most people applying for a loan are aware of the tax rebates available with the particular scheme. For instance, the tax rebated of Rs 1.5 lakh (as per section 80C) on the principal paid and Rs 2 lakh (as per section 24B) on the interest paid towards a home loan. However, due to scarcity of information about tax rebates available for unsecured personal loan applicants, a large percentage of applicants are yet unaware about the provisions. Hence, in this blog we will discuss the various tax benefits a personal loan subscriber can obtain, and how?
Tax benefits on home renovation loan: A personal loan applicant can avail tax benefits as per the Income Tax laws if the said credit is used as home renovation loan. In other words, you can claim the tax benefits by using the borrowed capital by using it for home renovation. That said, you must have all the receipts and the lender must be aware of the purpose of loan.
Tax benefits on medical expenses loan: You can claim the amount consumed towards paying medical expenses for an unplanned accident etc. as tax rebate even if the money was borrowed from a personal financing scheme. Check with a tax expert to understand how and how much.
Tax benefits on higher education loan: Lastly, you can also claim tax rebate on unsecured loans by using the borrowed credit for financing the higher education of yourself, or your child. This rebate will be available as per section 80E of the Indian Income tax laws.
Bottom line: Check your eligibility for the loan in advance. You can check do so via personal loan eligibility calculator.
Watch Also: 5 Myths about Personal Loans