Personal Loans

There are no tax benefits on availing a Personal Loan. However, the loan amount may be used to purchase tax savings instruments by the individual.

Home Loans

Indian residents are eligible for tax exemptions for loans taken for purchase of homes:

Interest paid:

As per Sec 24(b) of the Income Tax Act, 1961 a deduction upto Rs. 150,000 towards the total interest payable on the home loan towards purchase / construction of house property can be claimed while computing the income from house property. The interest payable for the pre-acquisition or pre-construction period would be deductible in five equal annual installments commencing from the year in which the house has been acquired or constructed.

In case of self occupied property, this deduction is allowed only for one such self - occupied property. The interest towards home loan taken for purchase, construction, repairs, renewal or reconstruction of house property is eligible for deduction under section 24(b).

Principal repayment of the home loan:

As per the newly introduced Sections 80C read with section 80CCE of the Income Tax Act, 1961 the principal repayment upto Rs. 100,000 on your home loan will be allowed as a deduction from the gross total income subject to fulfillment of prescribed conditions.