|Is a Two-Wheeler Loan Eligible for Tax Redemption?
Two-wheeler loans make bikes accessible to everyone. A loan is the best alternative for individuals who lack monetary reserves or are facing a financial shortfall. There are various benefits of a two-wheeler loan including up to 100% financing, flexible loan tenure, and affordable interest rate. Interestingly individuals can take advantage of tax deductions subject to a set of conditions.
Availing of Tax Exemptions on the Loan
Generally, bike loans are not eligible for tax exemption. Under certain conditions, it can be beneficial from the tax perspective also.
● In the current income tax framework, the borrower can take advantage of tax redemption if the bike is financed for business purposes.
● A small business owner, self-employed, or professional can claim an income tax deduction on the two-wheeler loan.
● Individuals can take a tax redemption on the interest paid as a business expense under section 80C.
Borrowers need to fulfil a few conditions to avail of a tax deduction on bike loans.
● The two-wheeler should be registered in the business owner’s name who wants it to use for business purposes.
● The borrower can claim transportation costs (including fuel) and vehicle maintenance costs paid for business purposes. The expenses incurred to maintain the two-wheeler’s life can also be claimed as a deduction.
Tax Exemption Filing
Individuals who want to claim a tax deduction on two-wheeler loans need to file ITR-4 accompanied by the interest certificates issued by the lending institution. Keep loan documents, bike purchase receipts, invoices and other transactional documents safe to claim the expenses. If the income tax officer finds the two-wheeler loan deduction claimed legitimate, the borrower can be benefitted from the tax deduction.
Online Two-wheeler Loan Application Process
Two-wheeler loans are readily available loans, and making an application is much simpler.
● Access the Amount: First, customers should ascertain the exact amount required and apply for the best loan. Approach a two wheeler finance company offering affordable two-wheeler loans, interest rates start at 0.99%.
● Check the Eligibility: The eligibility criteria are easy to meet.
– The loan applicant should be aged between 18-65 years.
– Self-employed or salaried can apply for a two-wheeler loan.
– The minimum salary requirement is Rs.96,000. Self-employed individuals should have an annual income of Rs.1,20,000.
● Get Ready for Documentation: A loan application can be completed online, and lenders can complete the loan process with minimal documentation. For quick and hassle-free processing, keep the following documents ready as per the bike loan eligibility.
– Identity proof – A voter ID card, PAN (Permanent Account Number) card, Passport, or Aadhaar card.
– Address proof – A voter ID card, Passport, Aadhaar card, telephone bill, driving licence, utility bill, or LIC policy
– Income proof – Form 16, Income tax returns acknowledgement, or bank account statement.
● Apply Online: Check the eligibility and refer to the lender’s official website and fill out the application form. Enter personal and professional details. Upload the required documents as mentioned above. The lender will check the details and documents to approve the loans. After successful verification, get ready to obtain funds.
This way, borrowers can apply for a two-wheeler loan and avail tax redemption as business expenses.