How to Avail of Tax Benefits on a Loan Against Property resource-Banner_WC
How to Avail of Tax Benefits on a LAP_Article_Details_WC
When you get your Loan Against Property application approved, you have essentially borrowed money with your property acting as collateral. While the tax benefits of Loan Against Property aren’t as high, one may still benefit from sizeable exemptions under the right conditions.
What are the Tax Benefits on a Loan Against Property?
The below-mentioned points will tell you how to claim the various Loan Against Property tax benefits and what doesn’t fall under the purview of a tax exemption.
- If the loan amount you received from your lender is used to fulfil business-related expenses, then you can enjoy tax exemption. Borrowers can claim rebates on the loan interest they pay, the processing fees, and the documentation fees as business expenses while filing the claim under Section 37(1) of the Income Tax Act.
- Salary earners can take advantage of Section 24 (B) of the Income Tax Act if the loan amount disbursed is used to buy a new residential property. Salary earners are allowed a claim up to Rs.2 Lakh as a tax rebate.
- Borrowers will not be eligible to file for tax benefits on a Loan Against Property if the loan amount is used to renovate the mortgaged building.
Additional Read: Loan Against Property To Start Your Business
When are tax exemptions not applicable?
When you are planning to use the loan amount for fulfilling the following expenses, you may not be eligible for tax exemptions.
- Renovating the mortgaged property itself
Why You Should Apply for a Loan Against Property?
While the tax benefits of a Loan Against Property may be subject to who the borrower is and the end-use of the loan sanction, all mortgage loan borrowers benefit from a Loan Against Property in the following ways:
- An individual, basis eligibility, can receive a sizeable loan amount which can cater to different financial needs
- Given the size of the loan amount, most lenders allow a flexible loan repayment tenor to help the individual easily repay the amount
- The Loan Against Property eligibility criteria are easy-to-meet and designed for easy approval
- The documents required to qualify for a Loan Against Property are minimal
- A Loan Against Property is the ideal choice for those who require immediate funding, as the funds can be disbursed into account in as little as 3 days*, from the time of loan approval and document verification
*Terms and conditions apply
Additional Read: Step-by-Step Process How to Apply for a Loan Against Property