If you have taken a personal loan, then you should be aware that you can get a tax benefit based on the use of a personal loan. Tax exemption on personal loans is available only under certain circumstances. You can get a tax benefit if you use a personal loan for a specific purpose. Know what the rules say
Under Section 24b of the Income Tax Act on taking a loan for renovation or purchase of a house, if you take a personal loan to buy a house or build a house, you will be exempt from tax of up to 2 lakh rupees on the amount of interest given on the loan. You can claim.
Section 24b does not make any difference in a home loan or a personal loan, and interest can be deducted at most 2 lakh rupees. Also Read: Income Tax Return: Do not forget these 10 mistakes while filing income tax return (ITR), notice will come
If a personal loan has been used for business after taking a loan for business, then the interest given on it can be claimed as an expense to reduce its tax burden.
Buy Assets from Personal Loans
If you have purchased jewelery with personal loan money, bought non-residential property or invested in shares, then you can get tax rebate on this too. Although the rebate cannot be taken on the year in which the interest is paid, the tax benefit will be available the year you sell the asset.
Many documents will be required
Remember that if you want to take advantage of tax exemption on personal loan then you will have to show many documents. These include documents such as voucher of expenses, bank certificate, selection letter and auditor’s letter.
