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Interest on Home Loan

Vikas (Accountant) (78 Points)

29 October 2019

Can a person get rebate of interest on Home Loan, if he has taken loan from other than financial institutions like relatives, friends etc.

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pd23071997 (None) (388 Points)
Replied 29 October 2019

Yes.

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Deepak Gupta (CA Student) (15922 Points)
Replied 29 October 2019

Yes, you can claim deduction for interest u/s 24(b) since this section does not specify that from where capital should have been borrowed.

But you won’t be able to claim deduction for principal payment u/s 80C since friends, relatives etc. are not included in the specified lenders list.

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Vikas (Accountant) (78 Points)
Replied 30 October 2019

Thanku deepak ji and pd23071997.

What proof to be submitted to the DDO to claim interest on Home Loan.

Kapadia Pravin (17264 Points)
Replied 30 October 2019

What do exactly mean ---submitted to DDO

The rebate upto 2 lakhs you will claim in your return. The proofs you may have to submit when a notice is received from ITO for assessment proceedings.

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Vikas (Accountant) (78 Points)
Replied 30 October 2019

Dear Parvin ji

DDO means Drawing & Disbursing Officer (A Govt. Officer in Govt. Organisation)

When a Govt. employee file his Income detail to the DDO. He shows all income and deduction with proof in the Statement of Income Tax.

DDO issues Form-16 after satisfting with all income and deductions of an employee.

My query is what kind of proof of deductions have to submit to the DDO to claim deduction u/s 24.

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Deepak Gupta (CA Student) (15922 Points)
Replied 31 October 2019

You can submit the interest certificate received from the lender.

Third proviso to Sec. 24(b), “Provided also that no deduction shall be made under the second proviso unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, or, conversion of the whole or any part of the capital borrowed which remains to be repaid as a new loan."

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Kapadia Pravin (17264 Points)
Replied 31 October 2019

That is what I was assuming and now since you clarified you can give self declaration of having taken private loans and estimated amount of interest payable and available Deduction under 24(2) . This will be for TDS deduction purpose from salary income. At the most if DDO insists some more proof then you may submit affidavit also.

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