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HOUSE PROPERTY LOAN

13 July 2009

For claiming deduction u/s 80C for House property loan (principal amount) and u/s 24 (1) (for interest portion), can a person take a personal loan and claim the 2 deductions as mentioned above. does it necessarily have to be housing loan. personal loan taken from banks/relatives will qualify or not

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24 Replies

BALASUBRAMANYA B N (CCI STUDENT....) (44682 Points)
Replied 13 July 2009

only for housing loan you will get exemption not for other loans...you cant claim personal loan to that sections...

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CA Lovenish Bansal (JOB) (343 Points)
Replied 13 July 2009

Interest can be claimed as deduction u/s 24(1), but for principal repayment it must be housing loan.

Thanks,

Lovenish Bansal

deepa_fca (29 Points)
Replied 13 July 2009

Mr Bansal,

As per what i read , it is just the opposite. for 80 C we get the deduction but not for 24(1). can u confirm

CA Lovenish Bansal (JOB) (343 Points)
Replied 13 July 2009

Yes Sir, I am sure about that.

Thanks,

Lovenish Bansal

deepa_fca (29 Points)
Replied 13 July 2009

No mr Bansal,

I am reading Sec 24(1), which says the the loan certificate must specify that it is for housing loan

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(Guest)

Hi All,

yupp Mr. Lovenish is correct.

(Guest)

Lovenish is right

CA Lovenish Bansal (JOB) (343 Points)
Replied 13 July 2009

Sir, section does not specify that it must be a housing loan. It says that if loan is taken for acquisition or construction of property, a certificate has to be taken to give the effect of that section. Even loan taken from individual, interest is allowed as deduction. But same is not true u/s 80C

Thanks,

Lovenish Bansal

deepa_fca (29 Points)
Replied 13 July 2009

I am quoting a FAQ of a reputed site which is actually confusing me

Are there IT benefits on personal loans?

Yes. If you have taken a personal loan from a bank, HFC, LIC of India, employer (State/Central Govt., local body or public limited company) and utilised the money for purchase or construction of a house, you can claim IT benefits for both principal and interest paid. If you have availed loan from a friend/relative, you can claim IT benefits on interest paid only. If you have availed loan for renovation of your house, you can claim deduction up to Rs. 30,000 pa on interest paid.

CA CS Bhumika Thakkar (CA,CS) (1618 Points)
Replied 13 July 2009

Originally posted by :deepa_fca
"	I am quoting a FAQ of a reputed site which is actually confusing me Are there IT benefits on personal loans? Yes. If you have taken a personal loan from a bank, HFC, LIC of India, employer (State/Central Govt., local body or public limited company) and utilised the money for purchase or construction of a house, you can claim IT benefits for both principal and interest paid. If you have availed loan from a friend/relative, you can claim IT benefits on interest paid only. If you have availed loan for renovation of your house, you can claim deduction up to Rs. 30,000 pa on interest paid.	"

ya,dats wat lovenish sd..dat only d interest part is allowed u/s 24..80 C will nt be allowed..unless housing loan..n frm d mentioned banks or employer..

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CA Vinay Saraf (CA) (148 Points)
Replied 13 July 2009

As in the respective sec it is said that if the loan is taken for the purpose for the construction or purchase of the house than only it interest payment will qualify for deduction u/s 24(1) so when we take the personal loan than it will not qualify for deduction

As in sec 80c also it is mention repayment of housing loan on other hand in ur case it would repayment of personal loan not housing loan

Mannurkar (Accountant) (159 Points)
Replied 13 July 2009

Originally posted by :Vinay Saraf
"	As in the respective sec it is said that if the loan is taken for the purpose for the construction or purchase of the house than only it interest payment will qualify for deduction u/s 24(1) so when we take the personal loan than it will not qualify for deduction As in sec 80c also it is mention repayment of housing loan on other hand in ur case it would repayment of personal loan not housing loan	"

Mr. Vinay is right

CA Lovenish Bansal (JOB) (343 Points)
Replied 13 July 2009

Originally posted by :deepa_fca
"	I am quoting a FAQ of a reputed site which is actually confusing me Are there IT benefits on personal loans? Yes. If you have taken a personal loan from a bank, HFC, LIC of India, employer (State/Central Govt., local body or public limited company) and utilised the money for purchase or construction of a house, you can claim IT benefits for both principal and interest paid. If you have availed loan from a friend/relative, you can claim IT benefits on interest paid only. If you have availed loan for renovation of your house, you can claim deduction up to Rs. 30,000 pa on interest paid.	"

As you mention in FAQ it is clarify that, principal is deductible only when it is taken from institution specified u/s 80C (xviii) for the purpose of construction of house property.

Thanks,

Lovenish Bansal