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About my rebate

20 February 2019

Respected Sir
i want to know that Can personal loan or car loan interest is deducted under any section.Can any tax rebate in the above loan

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5 Replies

deepa (student) (32 Points)
Replied 20 February 2019

no tax deduction available on car loan

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 20 February 2019

no tax benefit on car loan available for salaried individuals

Meenakshi S (Self employed) (198 Points)
Replied 20 February 2019

hello,

Interest paid on a Car loan is only allowed to self-employed or business owner and it has be used for business purpose.
A salaried employee cannot claim tax deductions on car loan interest repayments. The reason behind this is that a car is considered a luxury product.

Interest paid on Personal loan is not allowed. To avail the deduction of personal loan, the end use of loan taken is to be considered. If the personal loan has been taken for a purpose for which income tax deduction is allowed, then the deduction for the personal loan would be allowed, else it would not be allowed.

There are three cases when it is allowed:

Amount raised has been used for business and has been invested in the business, then the interest paid would be allowed to claim as an expense.
If it is taken to acquire/construction of a house, deduction of interest would be allowed u/s 24.
Amount invested for the purchase of any other asset like shares, Jewelry etc. the amount of interest paid shall be added to the cost of acquisition of the asset (so the benefit can be taken later).

thanks

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