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A two-wheeler is the quickest way to travel around town. It makes navigating in heavy traffic easily, and it requires much less parking space. But a two-wheeler can get you to tax exemptions too. How? Let’s find out.

One of the best ways to save on your tax through your two-wheeler is to take a two-wheeler loan. You can avail tax exemption on multiple grounds through a loan. If you are a self-employed individual or a small-business owner, your two-wheeler loan can save you a lot of money. If you are a delivery person who has taken a two-wheeler loan, you get an exemption as well. But not all persons can get a tax exemption on a two-wheeler loan.

To claim a two-wheeler tax benefit, you need to fulfil the following conditions

  • The vehicle must be used for business purposes. If you are a self-employed individual or a freelancer, the vehicle must be used only for professional purposes.
  • The two-wheeler should be registered under the name of the business or the business owner.
  • You must file your returns (ITR-4), and you must include the interest certificates issued by your lender.
  • All your receipts, invoices and other documents of the transactions should be in place to claim these expenses.
  • The ultimate power of deciding if your two-wheeler is applicable for tax exemption lies with the Income Tax Officer. He will assess your two-wheeler and your business, and decide if your claims for the exemption are legitimate.

If your two-wheeler is used for your business, you can claim for the following exemptions:

  • If you are a self-employed person, you can claim benefits on your taxable income and the expenses you bear for growing your business.
  • You can claim a deduction on the transportation costs, fuel and the expenses of maintaining the two-wheeler. You can list these costs as your business expense.
  • In some instances, the expense of maintaining the life of the two-wheeler can also be shown as a business expense, if allowed.
  • If your two-wheeler is on loan, you can claim the interest paid on your loan as a business expense. Some lenders also allow you to show the principle amount to avail tax exemptions.

If all these benefits make you want to take a two-wheeler, here are the eligibility criteria and the steps to take a two-wheeler loan:

Eligibility:

  1. The bike loan applicant must be between 18-65 years of age.
  2. The applicant must show residential stability by living in the same house, rented or owned, for at least one year.
  3. The applicant must have a stable job for a minimum of one year. If self-employed, the applicant must show proof of IT returns of at least two years.
  4. The applicant must show an excellent CIBIL score as presented by the credit bureaus.
  5. The applicant should have a permanent telephone number along with the necessary documents required for loan approval.

The Process:

Step 1: Choose a lender. Look at their bike loan interest rates. Compare and select the one which offers you the best deal.

Step 2: Fill an online form for a two-wheeler loan with your details. A representative of the lender will get in touch with you.

Step 2: Visit the showroom of your chosen two-wheeler’s dealership. A representative of the lender will guide you through the formalities.

Step 3: Submit the required documents, as stated by the representative. The lender will verify these documents.

Step 4: Once the loan is approved, you pick a two-wheeler of your choice and make the initial down payment. After the completion of all the formalities, you can take the two-wheeler home with you.

A two-wheeler is quick, and it can give your business the mobility it deserves.

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