Interest on borrowed capital

A loan sanction letter (on the letter head of the company) specifying that, loan has been given to its employees as "housing Loan". Also, Repayment schedule must also be provided by company.

It is not neccessary for company to collect document relating to credtworthyness of its employees (like bank--which asks for ITR copy, salary certificate etc.) This depends upon the policy of the company.

Yes, interest on loan is allowed as deduction. (company must give annual interest statement).

Wait for more replys on this.

as per my knowledger int on loan from Bank are only allowed as deduction

Section 24

Interest on borrowed capital is allowed as deduction irrespective of the fact from whom the load is borrowed. 

Section 80C

Repayment of housing loan is allowed as deduction if loan is borrowed from the public company.

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