LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Tax deductions for personal loans

Neha sharma (-) (1257 Points)

11 July 2016

One of my clients is taking a personal loan and is asking if any Tax Deduction would be allowed for Personal Loans.

He says he will take the personal loan and invest it exclusively in

Buying Real Estate, or
Invest in Business

Reply
Follow
Share

2 Replies

subhash kumar jha (PROFESSION) (445 Points)
Replied 11 July 2016

For housing loan u will get deduction of interest u/s 24B and for principal amount deduction will be allowed under section 80C

CA shanky pahoja (accountant) (615 Points)
Replied 11 July 2016

@ Neha as your question is vague

If you are asking whether your client is required to deduct TDS then its answer depends on whether loan is taken from banking co. or NBFC in case of NBFC answer is yes

If you are asking whether your client can claim TDS as deduction then answer is no as TDS is not an exp.

If you are asking whether interest or other exp. on loan is allowed then answer is yes if it is invested for buying personal house property then yes principal payment is allowed as per sec. 80c and under head income from other sources interest is allowed and if it expended to buy any assets related to business, Exp. is allowed after such asset is put to use. otherwise interest will be capitalised.

hope it helps you