Deduction in Respect of Various Loans - Section wise Details
Deduction in Respect of Various Loans. Well, taking a loan has its own advantages. Your instant liquidity needs are met. Also, these days, loans are available at quite a cheap rate of interest. But, there are certain additional advantages too!Let us have a look on them..
Deduction in Respect of Various Loans
Not just this, Amount of Principal repaid towards the loan is also allowed as a Deduction under Section 80C. The Aggregate of all deductions under Section 80C can be upto Rs. 1.5 Lakhs. Must Read - Belated Return & Revised Return – Complete Details
Section 80E-When the value of the house is Rs. 40 Lakhs or less and the amount of loan taken does not exceed Rs. 25 Lakhs, a maximum deduction of Rs. 1 Lakh is allowed under this section and this deduction can be claimed in financial years 2013-14 and 2014-15 which can be spread over these two years or in any one year. This section lapses in the current financial year 2015-16. So, Deduction won’t be available in case of house brought in the Current Year or the previous year. For this purpose, the loan should have been sanctioned between 1st April, 2013 & 31st March, 2014. So, if you haven’t filled your return for the A.Y. 2015-2016, you still have the option to take the benefit of such a loan. Must Read - Chapter VIA – All Deductions at a Glance
Education Loan:The interest paid on Education Loan is allowed as a deduction under Section 80E without any limits. Thus, it is beneficial to pursue studies taking Education Loan in every way. However, in this case, deduction is allowed only for the repayment of interest & there is no deduction for the repayment of principal amount of the loan. Also, not to forget, this deduction is available for loan taken to pursue studies in or outside India. That is, Section 80E is also available for Education abroad also. There is a time limit of 8 years for claiming the deduction which starts with the year the assessee starts paying the interest. That is, 8 years or complete repayment of the loan, whichever is earlier.