Is payment to a authorised bank neceessary to claim deduction of interest of loan u/s 24(b) of Income from house property ?
CA Babit Khurana
(learning is my passion)
(338 Points)
Replied 30 March 2010
You should take loan form authorised financial institution, and they should issue certificate in which it is described whether you can claim deduction for the same or not under section 24b and 80C.
Sunil Liladhar Kotak
(Manager (F & A))
(2025 Points)
Replied 31 March 2010
Dear Prince,
for the purpose of claiming the interest portion it need not be a authorised bank
but for the purpose of claiming the Principal amount following clause will apply
for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head Income from house property (or which would, if it had not been used for the assessees own residence, have been chargeable to tax under that head), where such payments are made towards or by way of
(a) any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or
(b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or
(c) repayment of the amount borrowed by the assessee from
(1) the Central Government or any State Government, or
(2) any bank, including a co-operative bank, or
(3) the Life Insurance Corporation, or
(4) the National Housing Bank, or
(5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or
(6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or
(7) the assessees employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or
(8) the assessees employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or
(d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee,
but shall not include any payment towards or by way of
(A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or
(B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or
(C) any expenditure in respect of which deduction is allowable under the provisions of section 24;
Amir
(Learner)
(4016 Points)
Replied 31 March 2010
Dear Prince,
Under Sec 24 to get the deduction of Interest - loan can be taken from friends or family. No doubbt about it.
But to get the benefit of principal amount the loan should be taken from the institutions as mentioned by friend Sunil in the above post.
So it is advisable to take the loan from those institutions only
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
CAclubindia
