Is Loan Against Property Taxable?
No, a Loan Against Property is not taxable. However, you can get Loan Against Property tax benefits if the loan amount is used for business purposes. If you are a salaried applicant, you can also avail some tax benefits on Loan Against Property. Here are some of the tax benefits you may be eligible for:
- Tax deduction on interest payment: If you have taken a loan against property for the purpose of renovating or constructing your house, you may be eligible for tax deduction on the interest payment of the loan. The maximum deduction that can be claimed under this section is Rs. 2 Lakh per financial year.
- Tax deduction on principal repayment: The repayment of the principal amount of the loan against property is eligible for tax deduction under Section 80C of the Income Tax Act. The maximum deduction that can be claimed under this section is Rs. 1.5 Lakh per financial year.
- Tax deduction on rental income: If you have taken a loan against property for the purpose of buying a house that you plan to rent out, you can claim tax deduction on the interest paid on the loan under Section 24 of the Income Tax Act. The entire interest paid on the loan can be claimed as a deduction from the rental income.
It is important to note that these tax benefits are subject to certain conditions and limitations. It is recommended that you consult a tax expert or a chartered accountant to understand the tax implications of taking a loan against property and to ensure that you are claiming all the eligible tax deductions.
