19 May 2016
one of my friend taken home loan from bank amounting rs 1250000 but sale agreement made only rs 925000 so difference rs 300000 is also condider as a home loan??
28 July 2024
In the scenario you described, where your friend has taken a home loan from a bank amounting to ₹12,50,000 but the sale agreement for the home is only ₹9,25,000, and the remaining ₹3,00,000 is deposited into a personal savings account, the key points to consider are:
### **1. **Purpose of the Home Loan**
**Home Loan Utilization:** - The amount of the home loan should be utilized for the purpose specified in the loan agreement, which typically includes the purchase or construction of a residential property. In your case, the sale agreement amount of ₹9,25,000 is used for purchasing the home, which aligns with the purpose of the loan.
### **2. **Tax Implications**
**Tax Benefits on Home Loan:** - **Interest Deduction (Section 24(b)):** Your friend can claim a deduction on the interest paid on the home loan up to ₹2,00,000 per annum for a self-occupied property, provided the loan is used for purchasing or constructing the residential property. - **Principal Deduction (Section 80C):** Your friend can claim a deduction up to ₹1,50,000 per annum for the principal repayment of the home loan under Section 80C, provided the loan is used for the purchase or construction of a residential property.
**Unused Portion of the Loan:** - The ₹3,00,000 that was deposited into a personal savings account but not used for the purchase of the home will not be eligible for any tax benefits. Tax benefits are only available for the portion of the loan that is used directly for the purchase or construction of the property.
### **3. **Considerations for Home Loan Documentation**
**Documentation:** - Ensure that the documentation for the home loan clearly reflects the actual utilization of the loan amount. The bank's records should show that ₹9,25,000 was used for the purchase of the property.
**Loan Disbursement and Utilization:** - If the bank disbursed ₹12,50,000 but only ₹9,25,000 was used for the property, the remaining ₹3,00,000 should be clarified in terms of its use. If this amount is kept in a personal savings account, it should not affect the eligibility for tax benefits related to the home loan as long as it is not utilized for any other purpose.
### **4. **Reporting to the Bank and Tax Authorities**
**Clarification:** - It is advisable to clarify with the bank regarding the loan disbursement and its utilization. The bank should provide a loan statement that reflects the amount used for the property.
**Tax Return:** - When filing the tax return, only the portion of the home loan used for purchasing or constructing the residential property should be considered for claiming deductions. The ₹3,00,000 should not be included in the claim for tax benefits if it was not used for the property.
### **Summary**
In summary, while the ₹12,50,000 home loan amount is greater than the sale agreement amount of ₹9,25,000, only the amount actually used for purchasing the property (₹9,25,000) is relevant for claiming tax benefits. The remaining ₹3,00,000 deposited into a personal savings account does not affect the tax benefits for the home loan as long as it is not used for any purpose related to the property purchase. Ensure proper documentation and correct reporting in tax returns to avoid issues.
If there are specific details or concerns regarding this situation, consulting a tax advisor or chartered accountant could provide personalized guidance.
CAclubindia
