11 August 2014
One of our client is Govt. Teacher and he borrow loan from "Shikshak Sharafi Mandli"...like Teacher's Association for the purpose of renovation of his house and got certificate from that mandali that he used it on renovation of house...
is it allowable deduction of interest paid on that loan u/s 24 in HP?
11 August 2014
dear hetvi. sec 24 of the I T act , gives deduction on interest paid on borrowed capital . it does not make any difference from whom the funds are borrowed. even if the funds are borrowed from private party, assesse will get deduction on interest on borrowed fund u/s 24
however, for claiming deduction on repayment of housing loan , act has mentioned specific person from whom funds are to be borrowed . pls refer to sec 80 (c)(2) xviii (c). pls do not get confused between sec 24 and 80 c. their may be cases , where u will get deduction u/s 24 for interest paid , but not u/s 80 c for repayment of that borrowed funds in your case , u will get deduction u/s 24, but u have to check wheather deduction is available or not u/s 80 c. in my opinion, u will not get deduction u/s 80 c for repayment
11 August 2014
pls check clause xviii (c) of sub sec 2 of sec 80 c. if the above sahakari mandali is co opertaive society and engaged in the business of financing the construction of house , then only u will get deduction on repayment otherwise not. u pls go through the sanction letter given by the society and MOA OF THE SOCIETY
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