As soon as people think of availing the loans to address their specific needs, they may be worried about the interest that is being paid the loan which differs from one bank to another. Loans offered by the banks are boon in disguise for the people who want immediate accesses to money to address their requirements. Are you aware of additional benefit offered by the loans to the customers who have availed it? There are few loans that offer tax benefits to the people that worry about paying the interest rates on the loan amount taken. The government offers tax benefits on these loans to encourage people to take them and address their necessities without any financial hardships.
Needless to say owning a home is a dream for everyone and availability of home loans is bridging the gap between the financial vacuum and dreams of the common man in India. The government is offering tax benefits on the housing loan in two ways. One is a tax deduction on the principal amount if the repayment qualifies for tax deduction under 80C of income tax act. You will also gain the tax deduction on the interest paid towards the housing loan up to 2 lakhs if it is self-occupied property. In case if you are paying a second home with the help of loan or take loan combined with a spouse, the interest paid towards the home will be deducted under section 24B of income tax act and this is limited to Rs 2 lakhs.
This is the second popular loan that stands eligible for tax deduction. The interest paid towards the education loan can be claimed under tax deduction. People take these education loans to fund higher education for their children so; the government of India gives a tax deduction for the education loan. This loan can be availed for your spouse, self or children and you will stand eligible to avail these tax benefits. You can get the tax benefits up to 8 years or throughout the tenure whichever comes first.
Do you know that unsecured personal loans are eligible for tax benefits? Surprised! Yes, you will be eligible to get the tax benefit on the personal loan if you are using it for a specific purpose. If you are using the personal loan for home renovation or using it for the down payment of the home loan, you will be eligible to get the tax benefits