The income tax filing session is in full swing. And, it is natural for people to want to avail some form of tax benefit. In this article, we will be talking about whether there is any tax benefit on personal loan.
Are personal loans taxable?
Unlike salary, business profit, or investment earnings where you get to keep the money, personal borrowings or loans have to be repaid, and hence cannot be a part of your income.
As a result, there is no income tax on personal finance. However, only personal credit or loan borrowed from any recognized NBFC or Bank is not taxable. There may be some tax implications if you receive personal loan or credit from family members or friends.
Additional Read: Learn about tax benefits on loans in India
Personal loan tax exemption 2021
There are no tax exemptions on personal finance. Since personal credit falls under unsecured loans without any collateral, the Income Tax Act (ITA) does not allow for any tax benefits on this type of borrowing. However, you can avail tax deductions on loans taken for specific purposes such as a Home Loan, Business Loan, Vehicle Loan, etc.
If there is no tax benefit, why take a personal loan?
While tax exemption is not one of them, availing personal finance has several advantages such as:
Personal credit or loans require no collateral. This means, you don’t have to mortgage or hypothecate any assets.
Processing personal finance requires minimal paperwork for processing, mainly because it is an unsecured loan. Applicants only need to provide their KYC documents and bank account statements. This also results in faster loan processing.
Financing up to 25 lakhs:
Availing personal finance is a great way to raise substantial amounts in case of an emergency. If you have a good credit score and a steady income source, you can easily avail of personal finance of up to Rs. 25 lakhs.
Relaxed personal loan eligibility:
Personal finance comes with relatively relaxed eligibility criteria, catering to salaried as well as self-employed individuals. While the specific criteria are different for different institutions if you are an Indian citizen between the age of 22 to 58 with a minimum monthly income of Rs. 15,000, you can apply for personal finance.
Additional Read: Tips to Save Money through Personal Loans
The bottom line
Are you seeking personal finance options with attractive interest rates? If so, your search is over! Tata Capital’s personal loan interest rates start at just 10.99%
If you are confused about how much you can afford, use Tata Capital’s personal loan EMI calculator, a simple way to plan your loan tenure and know precisely the amount you will pay each year.
Tata Capital’s personal finance options come with a hoard of advantages such as speedy processing, online application, and minimal documentation. Our personal loans for self-employed as well as salaried individuals are bound to suit any pocket.
So, what are you waiting for? Visit the Tata capital website now.