Understanding the taxation laws could help you save a lot and that applies to almost all aspects of your life.
In this video, a popular YouTuber helps you understand how you could save a substantial amount on a car loan using the taxation laws. It becomes critical to take charge of your finances. One can achieve that if he/she knows everything related to personal finances of which taxation is an important part. The video has been created by CA Sahil Jain who is a popular YouTuber and comes up with interesting content around taxes.
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Save Money on a Car Loan Using Taxation Laws
In this video, Sahil talks about various aspects of taxation. However, the one that we shall concern ourselves with is how one can save a ton of taxes on car loans. It is a common practice that people take loans to buy new cars. The rates of interest could range anywhere above 7% depending on the banks and your credit history. However, Sahil explains something known as the Effective Rates of Interest. This reflects the actual rates that you will pay after taking into consideration various tax deductions.
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He explains a cool way to reduce tax if you have taken a car loan. You could claim that your vehicle is being used for business. Hence, this is clearly not for the salaried class. In the case of the car being used to run a business or a company, it will be considered a business expense. Therefore, you will get tax benefits on the repayment of the loan interest. Things get even sweeter if you purchase an electric car for the same. There are tons of tax benefits on EVs offered by the government to promote the adoption of EVs.
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Borrow from Family
Another way to reduce your interest rate is by borrowing money from your family. For instance, if your immediate family member has an FD where they get a 5% return, you could take that amount and offer them the same return. Therefore, you will effectively get the ‘loan’ at 5% instead of the regular 7% or 8% from the bank easily saving 3%. In such smart ways, there are opportunities to save tax using the taxation laws. What are your thoughts on this?
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