You can also get the benefit of Income Tax on Personal Loan and Car Loan, know what are the rules
Meanwhile, I told them that they can get tax exemption on the interest payable on this loan under the Income Tax Act.
New Delhi, Balwant Jain. A few days ago a friend of mine called me. In the course of the conversation, he told me that he took an unsecured personal loan to repair his house after the monsoon. However, he looked a bit nervous about the high interest rate. Meanwhile, I told them that they can get tax exemption on the interest payable on this loan under the Income Tax Act. On this, he said that it was my day and he became very happy. I was very happy with this thing and then in my mind the idea of making the readers also aware of what kind of loan they could get income tax exemption and not on it. Let us know what kind of loan you can get exemption under Income Tax Act.
Home loan discount
If you take a loan to buy, construct or even repair a house, then you get an exemption under the Income Tax Act. You get the benefit of this rebate even if you pay interest to friends or relatives for this. Not only this, the processing fee or pre-payment fee deposited in this item is also treated as interest in terms of income tax. There is a difference between the property offered on rent and the tax rebate on your residential property. You can get a tax rebate of up to two lakh rupees on the house you are living in. At the same time, you can claim a tax rebate on the entire interest for the rental property.
At the same time, if you have more than two houses, according to the income tax rules, you can declare only two houses as self-occupied. You have to choose it. Other houses are treated as rented property and for such properties, income has to be shown through rent at the market rate. You can claim income tax exemption on the entire interest for the rental property. However, income from rental property can be adjusted against other income. However, a loss of up to two lakh rupees can be adjusted under this. If the loss is more than two lakh, then a loss above that can be carried-forward for the next eight years.
The property under construction has the benefit of tax exemption from the year of possession. Tax exemption on interest deposited during construction can be taken in five equal installments from the year of possession. At the same time, for residential property up to Rs 45 lakh, you can claim the benefit of tax rebate of up to Rs 1.50 lakh under Section 80EEA of the Income Tax Act on a home loan approved between April 1, 2019 to March 31, 2021. You will get the benefit of this facility only if there is no other residential property in your name at the time of approval of the loan. You will get this benefit even if you do not have the construction.
At the same time, up to Rs 1.50 lakhs like LIC premium, NSC, EPF, ELSS and stamp duty and registration fee under Section 80 (C) of Income Tax Act on payment of principal of home loan taken from specified entities for residential property. Get the benefit of tax rebate.
Benefits of tax exemption on education loan
There is a benefit of tax exemption on the payment of interest of education loan during a year and there is no limit on it. However, there is no benefit of tax exemption on payment of principal. The benefit of tax exemption can be availed from the first year of payment of interest for eight consecutive years. If you have taken loan for self, your spouse or child’s senior secondary education, then you will get the benefit of tax exemption. The thing to note here is that you will get this benefit only for a government recognized course. However, it does not matter whether the course is part time or full time. If you have taken a loan from any financial institution or approved charitable institution then only you will get the benefit of tax exemption. You will not get this rebate on interest paid on loans taken from relatives or friends. Parents can also get the benefit of having a joint borrower.
The salaried person does not get any tax rebate on the interest of the car loan. However, if the vehicle is being used for your business or profession, then you can also claim a depreciation in the value of the motor car used for the business with interest.
Personal loan or credit card loan etc.
According to the tax rules, you do not get any tax exemption on personal loans or loans on credit cards. However, if the personal loan is used to pay the margin money of the house or to buy the property related to the business, and if you are able to prove it, then you can get the benefit of tax rebate on the payment made on it. . However, in my opinion, payment of such personal loan cannot be availed under Section 80C of the Income Tax Act.