Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > Personal Use Loan > How Can a Personal Loan Help Save Tax in 2023?

Personal Use Loan

How Can a Personal Loan Help Save Tax in 2023?

How Can a Personal Loan Help Save Tax in 2023?

Personal loans are a great medium to finance a wide array of expenditures – ranging from higher education to grand wedding celebrations. Simply put, such loans are easily accessible, can be used for multiple purposes, and demand no collateral.

But is that all? No! They also help you save tax. Here’s how.

Tax benefits on personal finance: A closer look

Normally, if you avail personal finance, you will not be considered under the purview of taxation, the simple reason being that the said loan is not counted as income.

However, ensure that you avail personal finance from a reputed lender or the loan will be considered taxable if availed from an unidentifiable source.

Additional Read: How to avail Tax Benefits on Personal loan 

Personal finance tax benefits: When can you avail it?

Though not normally taxable, you can be eligible to claim personal loan tax benefits when the loan has been taken for particular purposes, as prescribed under the Income Tax Act of 1961.

Here are the specific end-uses for which you can claim tax benefits on your personal finance.

On credit used for business expansion

In case you have taken a personal loan for self-employed purposes, specifically for the expansion of your business firm, the interest you pay towards loan repayments will be eligible for a tax deduction.

On house improvement or renovation

Again, if the loan has been utilised towards home improvement or renovation, you will be eligible for a tax rebate, as per Section 24(b) of the Income Tax Act of 1961. In such a case, the interest you pay towards loan repayment, up to a maximum of Rs. 30,000, will be eligible.

Moreover, if you use up your personal finance amount on the improvement of a self-owned residential house, the Act allows a tax deduction of up to a maximum of Rs. 2 lakhs on the interest paid. On the other hand, if the house is a rented one, the total interest paid on the loan will be eligible for a tax deduction.

However, to avail the above-mentioned tax benefits, you must show proper documentation that proves that the loan amount was used towards home renovation.

Additional Read: Tax Benefits of Taking a Personal Loan

On the purchase of other assets

If your loan amount is invested in the purchase of any other assets such as non-residential house property, jewellery, gold, even shares and stocks, you can claim tax benefits on personal loan. In such a case, the interest paid towards loan repayment will be counted as the cost of asset acquisition, reducing total capital gains, thus providing tax benefits.

For educational purposes

Finally, if you take personal finance to meet expenses involved in securing higher education, you can avail tax rebates on the interest paid towards such loans. These benefits are available for a period of 8 years or until loan repayment, whichever is earlier.

In summation

So, you see; availing personal finance can help you save tax in 2023. If you’re planning to take such a loan, choose an authorised lender such as Tata Capital. Check your personal loan eligibility with us and avail up to a maximum amount of Rs. 25 lakhs.

You can customise your loan with us by using our online personal loan EMI calculator. Choose a loan amount and tenure that you’re comfortable with.

And since our personal loan interest rates start at just 10.99%, there’s no reason to wait! Get in touch with us today.

Apply Now

Get an Instant Personal Loan for all your needs !

Apply now
Popular Searches
loan without cibil personal loan for 15000 salary Loan for ring small cash loan on aadhar card pre approved personal loan What To Buy On Dhanteras Personal loan when self employed how to increase cibil score form 15g for pf withdrawal how to download aadhar card
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Useful Links and Resources

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.