When people need a large sum of money to cover a large expense, they turn to a loan against their property. A loan against property, unlike other secured loans, has no end-use restrictions, which means you can use the funds for whatever purpose you want, such as travel expenses, debt consolidation, or even property renovation.
A loan against property has many advantages, such as sizeable sanctions that can help you cover any expense, or the loan against property interest rates are marginally lower when compared to any other unsecured loan, such as personal loans, and if you meet the loan against property eligibility criteria laid out by the lender, you can expect to receive even more lucrative lending terms.
Although a home loan offers a lot more tax benefits but a loan against property tax benefits can help you save a sizeable amount of money. Here are some of the loan against property tax benefits you can claim:
Tax Benefits Under Section 24(b)
Salaried applicants who take out a loan against property to fund a new residential property are eligible for a tax deduction of up to Rs. 2 lakhs on interest payments. These tax breaks are only available if the funds are used to purchase a primary residence.
Tax Benefits Under Section 37(1)
When the loan amount is used for business purposes, tax deductions under Section 37(1) apply. You can deduct interest, processing fees, and documentation fees as a business expense.
No Tax Deductions Under the Following Scenarios
You will not be eligible for tax deductions if you used funds from a loan against property to pay for education, marriage, medical, or travel expenses.
Even if you have an ongoing home loan, you can claim tax deductions under Section 80C of the Income Tax Act. However, there are no Section 80C tax deductions available for a loan against property.
Have a look at: How to Avail of Tax Benefits on a Loan Against Property
.png)
0 Comments