Deduction in Regard of Various Loans. These days, loans are readily available at quite an inexpensive rate of interest.
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Deduction in Respect of Various Loans
Real Estate Loan:
This is thought about to be given at the least expensive rate, generally, the base rate & it is totally useful from your tax planning point of view. It has certain ramifications as defined in The Earnings Tax Act,1961 The Interest paid on Real estate Loans is allowed as a reduction under the Head– “Income from Home Property” upto Rs. 2 Lakhs when it comes to Self Inhabited Residential Or Commercial Property & there are no limitations when it comes to Interest paid on Discharge Home. If the loan is taken for Remodelling or Repairs & Upkeep of the Home Residential or commercial property, the reduction on interest under Section 24 will be limited to Rs. 30,000/-.
Not just this, Amount of Principal paid back towards the loan is also enabled as a Deduction under Area 80 C The Aggregate of all deductions under Section 80 C can be upto Rs. 1.5 Lakhs.
Should Read– Belated Return & Revised Return– Complete Information
Section 80 E—
When the worth of your house is Rs. 40 Lakhs or less and the quantity of loan taken does not go beyond Rs. 25 Lakhs, an optimum deduction of Rs. 1 Lakh is enabled under this area and this reduction can be declared in fiscal years 2013-14 and 2014-15 which can be spread over these two years or in any one year. This section lapses in the current fiscal year 2015-16 Reduction won’t be offered in case of home brought in the Existing Year or the previous year. For this function, the loan must have been approved between 1 st April, 2013 & 31 st March,2014 If you haven’t filled your return for the A.Y. 2015-2016, you still have the choice to take the advantage of such a loan.
Need To Read– Chapter VIA– All Deductions at a Glance
Education Loan:
The interest paid on Education Loan is permitted as a reduction under Section 80 E without any limits. In this case, deduction is enabled just for the payment of interest & there is no reduction for the repayment of principal quantity of the loan. Not to forget, this deduction is offered for loan taken to pursue studies in or outside India.
Must Read– Paying Tax is much better than Conserving Tax!
Other Loans:
Well, in the case of other loans, other than for housing loan & education loan, if the purpose for which the loan taken by you is related to your business or profession, you can declare the interest paid on such loans as your expenditure.
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