Is a Personal Loan Taxable?
Applying for a personal loan is an easy way to arrange money. However, finding a lender with an affordable interest rate is important. In this context, personal loan tax deductions are a much-needed profit for the borrower. Whether or not you tax a personal loan depends on the intended use of the loan. Suppose you want a personal loan from a legally licensed financial institution. In this case, the loan's principal is considered a liability and is not taxed. The same rules apply when applying for a personal loan online via the instant loan app. If the amount is borrowed from a credit source other than a friend, relative, or other professional, it will be considered your income. Therefore, this income is added to your total income when calculating your income tax, so there’s no consideration about personal loan tax exemption. There are three situations in which you can claim tax benefits on a personal loan: Personal loan for business purposes Personal loan to bu...