Interest on home loan

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 January 2016 Dear,

Can we claim interest on home loan as well as 80c benefits for the home loan taken from the foreign bank who just have the representative office in India.

Foregin bank would be funding home loan for NRI for the property purchase in India. Foregin bank would register charge in subregistrar for the loan advances.

So query is Can we claim interest on home loan as well as 80c benefits for the home loan taken from the foreign bank who just have the representative office in India, for the property purchase in India.

Regards,

CA Kedar Sakhardande

CA Kedar Sakhardande

(Expert)
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30 January 2016 Actually if you read the provision in detail you will notice that
The amount borrowed may not be necessarily bank (it implies it can be society, Company NBFC even if individual)
Only nexus of the amount borrowed and property purchased has to be proved.
So in your case there is no reason why interest on amount borrowed from foreign bank can be disallowed

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

31 January 2016 Thanks Kedar. Just wanted to confirm that..as rule suggest that income tax deduction would be available only when there is TDS on interest component.. further.... Certificate from foreign bank might not be available for deduction in Income Tax assessment regarding principle and interest component repayment.

Further, Bank defination as per the section includes foreign bank as well...?

Can you throw more light on it.

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Querist : Anonymous

Querist : Anonymous (Querist)

31 January 2016 Interest when not deductible from “Income from House Property” [Sec. 25]
Interest on borrowed money which is payable outside India shall not be allowed as deduction
u/s 24(b), unless the tax on the same has been paid or deducted at source and in respect of
which there is no person in India, who may be treated as an agent of the recipient for such
purpose.

Pls answer even in this regard..