New Delhi, March 6 -- Usually when apersonal loan is disbursed, the loan seeker is free to use the money for anything s/he wishes to. Unlikehome loan repayment, personal loan borrowers are not given any income tax benefit.

However, this rule is subject to certain exceptions. One can claim income tax benefits on interest paid when the personal loan proceeds are used for any of the following purposes.

I.For renovation of house or purchase: When you are using the loan money for renovating or purchasing the house, you are entitled to claim income tax exemption against the interest paid under section 24(b) of the income tax act.

II.For business expense:When you use the loan money on business expenses, you can then also claim income tax exem...