Home loan

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 March 2017 Hi,

I have a home loan in SBI, and as on date outstanding amount is 12 lacs. As per the schedule I must pay the EMIs for 11 more years to pay off my loan. One of my friend stays in US and is ready to lend me interest free loan of 12 lacs (1 lacs each month for 12 months) to finish my loan. I will pay of his amount over the period of 3 years without any interest. This will help me to save huge amount on interest which I have to pay to the bank.
1. Is this possible from taxation point of view?
2. Does me or my friend have to pay tax in this case?
3. What all points do I consider before making this move.

Thank you and waiting for your response

ALKESH T MEHTA

ALKESH T MEHTA (Expert)
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10 March 2017 If you do not redeem home loan,you will be benefited for 11 years for tax benefit. Moreover,principal portion of unpaid loan can be claimed U/S 80 C.In case of loan from your friend,you have to make agreement with your friend .Only,principal amount in this case,can be claimed as deduction U/S 80 C.