India is the biggest market for two-wheelers in the world. Not only do bikes allow you to zip through city traffic, but you can also maneuver with ease on unmotorable rural roads. Most importantly, two-wheelers are extremely fuel-efficient and a highly affordable mode of transport for the average Indian.
Despite its affordability, it is understandable that not everyone may have the disposable cash to pay upfront for a two-wheeler. This is where a two wheeler loan makes it easy to fast track your dreams of cruising on the road.
Availing of a two-wheeler loan
Getting a bike loan is easy, and you can approach it in two ways. You can either opt for a direct two-wheeler loan from a financing agency or take a personal loan and purchase a two-wheeler from the money you borrow.
In the first case, the vehicle itself becomes the collateral for the loan. A personal loan, though, is unsecured and needs no collateral to be placed. The interest rate for either loan is usually about the same. It is hence recommended to check the interest rates and two wheeler loan eligibility online to select the option that is most affordable and suits you best.
Additional Read: Advantages Of Availing A Two Wheeler Loan In India
Availing of tax exemptions on the loan
Other than the advantage of repaying the loan in instalments, you can also claim a two wheeler loan tax exemption. However, this exemption or tax benefit is only available if you are using the two-wheeler for business purposes. You can declare the vehicle as a business asset; the interest paid towards the loan then can be used as a deduction under Section 80C of the IT Act subject to a maximum of Rs 1.5 lakh in a financial year.
Do keep in mind that the bike loan tax exemption is available only on the interest component and not on the principal repayment. Also, as mentioned, the vehicle should be used for business purposes and will have to be registered either in the name of the business or the primary business owner/freelancer to avail of the tax exemption.
Additional Read: Learn About Tax Benefits on Loans In India
Additionally, you can also claim the cost of fuel and maintenance as transportation cost incurred as a part of the operating costs of the business.
Whether you are looking to buy a 2-stroke moped or a 1200CC sports bike, you can get a loan for any type of two-wheeler easily with Tata Capital. Apply online for a bike loan, and on approval, the amount will be disbursed quickly, sometimes within a couple of days too. With Tata Capital, you can even look to choose the tenure you are most comfortable with along with a suitable EMI plan.
To reduce your tax liability, remember to furnish all loan documents, interest certificate and invoices when making a claim for a two wheeler loan tax exemption.