There are many instances in our lives when we require an instant influx of cash but owing to the high interest rates and strict eligibility criteria, we are unable to do so. During such times a loan can be a blessing in disguise as it offers high value loan against our assets at a very nominal interest rates.
Some of the usually offered collateral include -
Self-occupied residential property
Rented residential or commercial property
Vacant residential or commercial property
The loan so obtained can be used for a wide variety of purposes including business requirements, financing a wedding or education, emergency travel abroad, purchasing a retirement home, medical expenses and much more.
However, apply for loan against property not only provides the liberty of using the sanctioned loan amount as per our needs and benefits but also provides tax benefits too, a few of which are as follows -
If you taken a loan against property, you can use it claim deductions on the interest part of a an education loan under Section 80E of the Income Tax Act. There is no upper limit on the amount of deduction that can be claimed but it must be understand that the deduction is only for the interest and not on the principal amount.
If you use your loan against property for business reasons, then the interest which is paid can be regarded as a business expense when filing your IT Return. This helps in claiming a deduction from the gross business revenue as per Section 37(1). This reduces the taxable profit and in turn reduces the tax liability for the given financial year.