House construction loan interest treatment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2013 Hi,

At my native place a old house which is own by my father. For reconstruction of this house I take a personal loan from bank of rs. 5,00,000/- against salary for which no property was kept as security with bank.
My query is that can i claim deduction on my personal loan repayment installment including interest u/s 24(b) & principal u/s 80c.

pl solve my query & help me.

Regards,

Amit

Nikhil Kaushik

Nikhil Kaushik (Expert)
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21 February 2013 Dear Amit,

Theoretically NO.

the benefit of 80C and 24(b) are restricted to the owner of the house, which in this case is your father.

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Anand

Anand (Expert)
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21 February 2013 No you will not get the benefit as rightly stated by Nikhil.
What you have taken is a personal loan which is then applied towards house property, not owned by you.

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Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2013 Mr. nikhil Sir,

Thanks for the answer.

If property is owned by me , then personal loan can be used for the benefit of sec 24(b) & sec 80 c. if yes then at the time of filing return what proof will be given for the personal loan.

Regards,

Amit

Nikhil Kaushik

Nikhil Kaushik (Expert)
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21 February 2013 There is no need to submit any proof at the time of filing the Income-tax return. If and only if your case is selected for scrutiny, you shall have to provide a copy of the loan documentation as well as a proof of repayment (copy of the account statement or a certificate from your banker should suffice for the same).

Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2013 Nikhil Sir,

Weather personal loan utilised for repair of house then it will qualify for the deduction from the income tax. & under sec. 24(b) what will be the maximum limit available for deduction i.e. 30000/- or 150000/-.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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21 February 2013 I see no reason for which personal loan can be disqualified. Atleast the language of section 80C doesn't suggest any such disqualification.

If I am not wrong, interest limit should be Rs 30,000.

Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2013 Thank You Very Much

Regards,

Amit

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