Hello All,
I took a personal loan to borrow land. This is a agricultural land. If i declare this investment in my investment declaration for the current financial year will i be able to avail the tax benefit for the interest i am paying on it.
Thanks,
Hi Nikhil,
Firstly, as a principle "interest or repayment of loan" is allowed as a deduction only if it taken under a scheme approved by the any prescribed regulator therefore personal loan doesn't come under its perview.
Secondly, under sec 80Cbenefit of "interest or repayment of loan" is available only for purchase of residential property.
Dear Nikhil,
Read Sub section 1 of section 14A of Income Tax Act,1961
"For the purposes of computing the total income under this chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this act."
Agricultural Income is exempt from tax so any expenditure incurred in relation to earning any income from agricultural will not be allowed. Hence Interest cost will not be allowed.
Hi Madhavi,
I have a query for tax exemption benefit, i had taken personal loan to assist my brother in taking home loan and for renovating my house.
could that be claimed as tax benefit. could you please advise me of the procedures of how to claim the benefit. please advise me.
CAclubindia
