Does Your Business Loan Get Tax Benefits ?
Business loans are required at various stages of business activities like expansions, purchase of working capital, equipment etc., so as to maintain consistent cash flow for ensuring smooth business operations. Business loans carry an interest charge which is deductible as an expense from your gross income. Are business loans tax-deductible in India? Yes, business loans are tax-deductible in India. As per the provisions of the Income Tax Act, 1961 the interest component of the business loan is eligible to be deducted from profits earned in your business. The Income Tax Act further clarifies that business loans availed are not income from the business, through which the business earns profits. Tax Benefits under Business Loan ⦁ Interest charge on business loan - Business loan entails an interest charge which has to be paid back to the lender as part of the monthly instalment. The interest component of the business loan is eligible for a tax deduction as a form...
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