Business Loan in Bangalore

Bangalore is home to several highly profitable businesses in India. If you have a valuable business idea, you will be pleasantly surprised by the economic stability and the extensive business and investment opportunities the city has to offer. The feats of technology have earned the city the title of the ‘Silicon Valley’ of India. Considered as one of the fastest-growing cities, Bangalore is also home to various small scale and largescale firms that specialize in R&D, software and electronics production. With that, many new companies and small businesses are emerging in the city. Hence there’s a need for a business loan in Bangalore. There are many banks that offer loans to businesses in Bangalore.

However, bank loans are mostly offered only when the business owner offers collateral, i.e. they are collateral business loans. Business Loans are the financial products intended to fulfill the funding requirements of a business. This loan can be used for meeting working capital requirements, inventory and equipment purchase, and for other business-specific growth purposes. But with the simplification in the loan process, the major concern for the business owners is the repayment of the loan and its interest rates. Along with it, there are other worries looming due to the increase in tax with the surge in the capital. Moreover, business loans do not fundamentally alter what one owes in taxes.

According to the Income Tax Act, 1961, receiving capital through a loan is quite different from earning revenue for the business. Although big companies and businesses can avail collateral loans, mostly small businesses cannot afford to pledge collateral. Business loans available at Finserv MARKETS help entrepreneurs reach their full potential. Bajaj Finserv Business Loan in Bangalore is collateral-free and all our business finance offers in Bangalore are designed to help the small businesses reach new heights.

Benefits of getting a loan for Business

When taking up a loan a borrower can avail a number of benefits.

  • The amount acquired from the loan can be used to serve various business purposes.
  • Easy and flexible repayment options offered by various NBFC’s (non-banking financial institution) make the loan reimbursement a bit more acceptable.
  • The distinct customized loan types offered by banks and other lending institutions can be used to meet the varying demands as per your business requirements.
  • The interest paid on loans for business is tax-deductible due to it being termed as a business expense. This reduction in interest payments lightens up the borrower’s tax burden.

Tax Benefits that can be availed under a loan for Business

When you get a loan for your business, there are varied rates of interest added to the loan. This interest imposed on loans for business is categorized as an expense due to loan funding being utilized in fulfilling your business goals. The interest charged loans taken for business needs to be paid to the lender on borrowed money. Therefore, the interest paid on loan is affirmed as a tax-deductible expense.

But before calculating the tax liability, the interest paid on the loan gets deducted from business profit; eventually leading to a reduction in net taxable profit of the business. However, no maximum limit has beenspecified to claim the interest amount as a tax-deductible expense.

What are Tax Deductible Expenses? 

Tax-deductible expenses are almost any reasonable expenses that help to earn income for businesses. Deductible expenses are those that can be removed from a company's income before it is subjected to taxation. The tax is paid on the net profit earned by a business in a financial year. This net profit or income is calculated after deducting some essential expenses from gross income. To lower down the taxes levied, all expenses should be deducted cautiously from the gross income.

EMIs on the loan for business can significantly impact to lower down your taxable income. Thus, before applying for a loan for business, it is necessary to check for interest rates, processing fees and other obligatory charges on loan.

Is interest in a Business Loan Tax Deductable? 

If your loan is being utilized for business purposes, then the interest on the loans will be tax deductible. In India the tax authorities allow the business owners to avail tax benefits on business financing. Since the interest is paid to the lending institution as a fee on borrowed capital, it is included in business expenditures. It is regarded as the standard entity to be included in business tax deductions. Thus, your loan interest charges are deducted from gross income to calculate the net taxable income. Business owners are required to maintain proper financial records of payments to claim these benefits.

One thing that needs to be considered is that the principal loan amount is not included in the tax deduction category. It is just the borrowed amount that is issued for a certain duration and not considered as an income. Hence, the repayment of the principal amount is just a process of returning the borrowed amount. Availing a loan for business is a feasible option for the growth and expansion of a business. However, before you make a final decision it is imperative to assess the requirements of the business. Finserv MARKETS is an online platform where you can avail financial products such as business loans, personal loans, etc. Bottom of Form

By getting a loan at Finserv MARKETS, you can get the finance you need to purchase equipment for your business. Business loans available at Finserv MARKETS have attractive interest rates. The loan amount can be used for undertaking various business operations, such as an expansion of your business, acquisition of other companies, buying high-value and getting new machinery or equipment, etc. On Finserv MARKETS, customers can get 500+ financial and lifestyle products to choose from such as Personals Loans, Business Loans, Loan against Property, Professional Loan, Car Loan, etc.

Finserv MARKETS business loans are collateral-free, which means you do not have to put your personal or business assets on the line to get the finance for your business.  

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