You must have heard of many people talking about the importance of filing income tax return. There are of course many benefits of doing so like you can claim refund of taxes, NIL chance of IT notices etc. What many people overlook are the most important benefits i.e. income tax return for bank loan and visa. Today, we’ll give you detailed insights of not only benefits of ITR for bank loan & visa but also it’s major tax benefits. So hop on the ride, buckle up your seatbelts and let’s get started.
BANK LOAN & ITR
We all have dreams, it can be opening a cafe, factory, building new home etc. How to realize those dreams? Money is the answer, not just little but a big amount which runs into lakhs & crores. For that purpose, you will need a loan from bank but money isn’t lended to everyone just like that. All leading banks ask for your past 3 years ITR to establish your financial stability. This gives them assurance that you’ll be able to repay back the loan within the time provided.
There are different types of loan with different tax benefits. Let us discuss them one by one. You can also get in touch with our eCAs for expert assistance on financial planning.
- Home Loans
Owning a home is a dream of almost every indian today. To turn that dream into reality, many tax benefits are provided on the payment of EMI on home loans by our government. Let’s know about them:
- Interest and principal payments enjoy some tax exemption benefits depending upon whether you took loan for purchase or construction or repair or renewal..
- When you pay principal amount, a deduction upto ₹ 150000 can be claimed u/s 80C.
- Deduction u/s 80C can be taken only when a new house is purchased or constructed. 4. The new house cannot be sold for 5 years from date of purchase or completion of construction.
- On interest payment of loan taken for purchase or construction of house property, maximum deduction of ₹ 200000 can be claimed in House Property head u/s 24.
- Interest deduction can be claimed after construction is completed. Pre-construction interest can be claimed over period of 5 years.
- In case of loan availed for any repair/ renewal, max deduction of interest payment shall be ₹ 30000.
- Education Loan
Do you want to pursue higher education abroad or in top schools of India? Such education costs a lot and to motivate more students for same, deduction u/s 80E is given.
- This deduction can be claimed only on interest payments of education loan.
- Education loan can be for yourself/ your wife/ your children/ person of whom you are a legal guardian.
- Good news! There is no limit for amount of interest that can be taken as deduction.
- Deduction will be given only for 8 years and time limit shall start from the year you start paying EMIs.
- Vehicle Loan
Usually there is no specific tax benefit given on purchase of vehicle using loan. But if you are purchasing it for your business use then you can get benefit of depreciation.
VISA & ITR
Are you planning for a vacation or business trip abroad in near future? If yes, then you need a visa. You’ll be surprised to know that travel agencies, embassies etc ask for your previous year’s ITR before issuing visa permits. The reason is that in past years, many people have given fake income documents. Since an ITR acts as proof of income authorized by the government, it’s considered credible.
We bet you would not have known about the benefits of ITR for bank loan & visa in such detail. For more such cool & interesting updates, keep following our blog and social media pages. If you are looking to file your ITR online and get in touch with our eCAs today.