HOME LOANS-RELATIVES-INT DEDUCTION

This query is : Resolved

VISWANIVAS (Querist)
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03 June 2009 Interest paid on loan taken for purchase, construction, repairs, renewals or reconstruction of a house property will qualify for deduction under Section 24 in computing the income from house property. Distinction is not made between loans taken from a HFC and from others, including friends and relatives. Interest paid to friends and relatives on the loan taken for acquiring the flat claimed as a deduction. ABD is son of EFG. Father gave a loan to son for purchase house on usual terms.(through bank a/c transactions Subsequently, son(ABD) has given loan to father for purchase of house (in the same year) on having different tenures,terms & interest rates. Father & Son are privately emplyed.Since Job market is volite now a days, either/both can securitise the loan/interest among other friends/relitives for liquidity-if need be-, without foregoing tax deduction on home loan interest.Are the transaction OK from Income tax angle? If yes, elabarate prcedure & precautions.

Deepak Goel

Deepak Goel (Expert)
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03 June 2009 You cannot take loan from your father or relative for the purpose of housing loan rebate.

CA. Gurdeep Singh Chawla

CA. Gurdeep Singh Chawla (Expert)
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03 June 2009 qualify for deduction under Section 24

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M Prabhakar Menon

M Prabhakar Menon (Expert)
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03 June 2009 Section 24 of the Income Tax Act 1961,is clear about the lender,only thing the whole transaction should stand tax scrutiny in other words Chapter XXV requirements of the same Act should be satisfied.