Parmod Agarwal (Assistant Manager) (394 Points)
27 September 2011Dear All,
Our Company has provided loan @ 7% per annum. Some employees want that we will treat this loan as housing loan. what will be documentary evidence required for us to allow this loan as housing loan and whether the interest paid on this loan is allowed as deduction us 24b? please clarify the same.
thanks
Parmod
Jayesh
(Internal Auditor)
(214 Points)
Replied 27 September 2011
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.
valji
(Accounts manager-MBA)
(2150 Points)
Replied 27 September 2011
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.
CAclubindia
