Do not get surprised with the fact that a loan can fetch you Tax Benefit. Most of us already know about the tax benefits offered by a home loan, but very few would know the fact that you can save your tax on Personal Loan as well as Education loan. It is very much true that you can save tax on Home Loan, Personal loan and Education Loan, let us read how.

Home Loan:Home is a dream of everyone. People spend their life’s earning to have a home of their own. Home Loans are intended to offer people with financial assistance when you want to buy a home. So if you were already borrowing money to buy a home and will have to pay the EMI every month it will barely make sense to let the money go in paying taxes. Here’s how you can save tax when you borrow home loan:

➤ The principal amount qualifies for tax deduction under the Section 80C of the Income Tax Act.

➤ The interest rate amount that is paid as EMI is also can also be considered

➤ For a self-occupied property the maximum amount that you can avail and claim as Interest Deduction from your income is Rs.2 Lakhs

➤ If a person has two houses then only one property can be counted as a self-occupied property and the second home is considered rented out even if the house has not been rented out.

➤ In case where you and your spouse has jointly bought a home, both of you will entitled to claim Rs.2 Lakhs.

➤ In case of rented out properties the amount that is paid towards the rate of interest is applicable and considered for tax deduction under the Section 24B of the Income Tax Act. However, this has been limited to Rs.2 Lakhs w.e.f. 1st April 2017.

➤ The rent that is received also gets added to your income.

Education Loans:

Education Loans can be borrowed by the student himself or by the parent or legal guardian of the student for further education either in India or Abroad. Education Loan too can help you save tax if they are borrowed from a reputed institution. Here’s how you save tax when you borrow Education Loan

➤ You can save tax on Education under Section 80E of the Income Tax Act and pursue higher education.

➤ The amount that is charged towards the interest of your loan is applicable for tax deduction.

➤ Tax benefit on Education loan can be paid for a period of 8 years or the loan tenure for which you are borrowing the education loan.

Personal Loans

Personal loans also help you save tax let us know how:

➤ Tax benefits can be availed on a personal loan if you have borrowed personal loan for the purpose of home renovation or to make a down payment of home loan.

➤ If you have used the personal loan amount towards the renovation and repair works at home you can easily claim such expenses as tax deduction.

➤ You can claim upto Rs.2 Lakhs on the interest amount that is paid on the personal you borrowed.

Manage your finances in a responsible manner so that you fetch TAX benefits on your Home Loan, Education Loan as well as Personal Loan.

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