A car loan can help you save on taxes if you are running your own business and hold an occupation as self-employed. But, the car loan must be taken for business purposes.

A salaried employee doesn’t have the authority to claim tax deductions on car loan interest rate repayments like a home loan. The reason behind this is a car is considered a luxury product.

If you are running your own business and hold an occupation as self-employed and you have taken a loan to purchase a car for your business, you can claim the interest you pay as business expenses. This means that you can easily reduce your taxable income by the amount of interest you have paid in a year.  In this article, we are going to discuss the tax benefits and exemptions on car loans.