Tax Benefits Associated while Taking a Loan Against Property
Whether you want to raise finance for your personal or professional needs, choosing a loan against property is the best way to do this, especially if you need a high-value loan that runs into lakhs or crores. Apart from helping you attend to needs such as buying equipment or leasing office space, purchasing a home or renovating your bedroom and other spaces, financing your child’s wedding or his/her overseas education, the Loan Against Property Interest Rates are quite low, thus offers you other benefits, including ones pertaining to your tax obligation.
Essentially, the tax benefits depend on how you use the sum from this loan. Take a closer look at the tax benefits that a loan against property offers.
- If You Use the Funds for Business Purposes
If you use the money from a loan against property to finance business expenses, you can claim them as a tax deduction according to the provisions of the Income Tax Act. As per Section 37(1), you can claim the interest that you pay towards the loan against property, as well as incidental expenditures such as processing fees, document charges, etc. You can’t claim any benefit on repayment of the principal amount.
- If You Use the Funds for Personal Purposes
When you use a loan against property for personal reasons, you can gain from several benefits; however, a tax benefit isn’t one of them.
But, to find out how to fully utilise this loan option, take a look at the types of properties that you can pledge to avail a loan against property.
- Self-occupied residential property
- Rented residential or commercial property
- Vacant residential or commercial property
- Shared property
Now, take a look at how you can use funds from a loan against property.
- To buy residential property
- To buy commercial property
- In the form of a Flexi Loan
- For lease rent discounting
- To finance personal expenses like a wedding, education, or home renovation
- To finance business-related expenses like buying assets
You can avail this amount as a Flexi Loan when you apply for Loan Against Property. Here, you can withdraw from the total sanction as per your needs, and pay interest only on the amount that you end up using. Besides, you can pay interest-only EMIs and repay the principal at the end of the tenor. You can withdraw, repay and redraw funds as many times as you wish to, without incurring any charge. Also, you don’t have to apply for a fresh loan each time you need funds. Simply make a request online and the amount will be disbursed to you.
If you’re keen on applying Loan Against Property, you can do so with ease. This is because the loan against property’s eligibility criteria is minimal, as are the documents required. Take a look at how you can apply online.
- Fill a short online form with basic personal and financial details.
- Await a representative to contact you within 24 hours.
- Receive loan approval in 48 hours.
- Submit the documents and get disbursal directly to your account post verification.
So, take a loan against property from a reputed lender, enjoy a plethora of benefits including a tax benefit and make repayment easy by choosing a long tenor.