Taking a loan is often necessary, whether it’s for a
home, education, car, or personal needs. But did you know loans can also help you
save on taxes if used wisely? Experts explain how.
1. Home Loans – Biggest Tax Benefit
·
Principal Repayment: Eligible for deduction under
Section 80C (up to ₹1.5 lakh per year).·
Interest Paid: Deductible under
Section 24(b) (up to ₹2 lakh per year for self-occupied property).· Combine both to
maximize tax savings on your home loan.
2. Education Loans – Study & Save
· Interest on loans taken for
higher education is fully
deductible under Section 80E.· Applies to
self, spouse, or children.· Deduction is
available for 8 years or until the interest is paid, whichever is earlier.
3. Car Loans – Limited Tax Benefit
· No direct tax deduction on car loans for personal use.· If the car is used for
business purposes, the
interest paid may be claimed as a business expense.
4. Personal Loans – Know the Rules
· Personal loans
do not offer direct tax deductions for individuals.· Tax benefit is only possible if the loan is
used for business or investment purposes, in which case the interest may be claimed as an expense.
✅ Final Takeaway
Loans can be more than just a financial tool—they can also
help reduce your tax liability if you plan strategically. Make sure to
understand the rules for each loan type to get the maximum advantage.
Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.