home loan from private individual - ded allowed or not?

you can take deduction of interest only but not of principal amount . If lender is charging interest. 

hi

thank you

for that interest deduction is there any ceiling limit for amount?

please reply

Miss Sameera

As per my knowledge if any person take loan for cons. of a house so he can claim ded. of both but in diff. sections as he can claim the ded.of Intt.U/s 24 of the income tax Act-1961 Under head house property Subject To condition that if loan taken Befor 01-04-1999 for Any purpose and house used as Self Occupied then ded. will be allowed of Max-30000 in a year and in case of loan taken after such date and hopuse is used for sam then you can claim ded. for 150000

In case of house used for Letting out purpose than there is no limit you can claim ded. of any amount.

and if loan sub. per acquisition intt. than ded. of same can also be taken in 5 Equal inst. Commencing from the date of/year in which the cons is completed and ded.of principal amount can also be claim under sec-80C sub . to max of Rs 100000 in a year.............. 

Yes You can clain deduction but your client should be having proper documents of loan...a certified copy from the person from whom he takes the loan..this is because an incometax office can ask for the loan documents for scruitiny purpose....

any case laws in support of this??? please mention the case, if any. 

As mentioned above, the interest payments on home finance are allowed as a deduction to individual tax payer from their income of the year.  To claim the benefit of interest payment in respect of home finance, the loan can be taken either from house finance institutions, banks or private lenders.   There is no provision in the Income-tax Law to provide for a maximum rate of interest. Thus whatever interest has accrued to the tax payer in respect of residential house finance with loan the same would be allowed as a deduction. Such interest on loan for residential property or for let out property is allowed as a deduction irrespective of the fact whether the interest amount has actually been paid during the year or not paid or partly paid.