22 June 2023
One State Organization in Maharashtra has issued form 16 in which they have not claimed interest on home loan interest on accrual basis & full installments is claimed in 80C as Principal repayment. This is concessional low interest loan given to employees say for 20 years of which first 15 years will be use for principal recovery & last 5 years for interest recovery out of repayment installments. But Section 24(b) allow interest on accrual basis & not paid basis even if interest paid in next F.Y. & we wish to claim it on when paid as per organization interest recovery mechanism mentioned above & interest will also be shown by employer in form 16 when actually recovered in some last years installments. Is form 16 is correct & if not then shall I claim Interest as & when accrued for for each F.Y.?
22 June 2023
Charging interest and clubbing it to the balance is continuous process. Once principal is over by 15 years, on what basis interest will be charged for next 5 years? Thus it cannot be denied that the interest amount gets accumulated to balance of loan amount. Based on that get calculation of interest amount bifurcated from the organization. Alternatively, you can also calculate the accrued interest for all 20 years.
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