Adithya Kiran.A (Chartered Accountant) (46 Points)
02 January 2013Can one guide me regarding is there any specific format or form for interest certificate for claiming deduction u/s24(b) especially if the loan is borrowed from friends or relatives or others other than banks and financial institutions?
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 02 January 2013
No, Adithya.
Devendra
(Chartered Accountant)
(4775 Points)
Replied 02 January 2013
There is no specific format / certificate.
Regards,
Devendra
CA Gaurav Verma
(Chartered Accountant)
(65 Points)
Replied 02 January 2013
As per proviso to section 24(b) :-
that no deduction shall be made unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, or, conversion of the whole or any part of the capital borrowed which remains to be repaid as a new loan.
Also, no other format has been notified. However the certificate must contain the amount of interest payable by the assessee.
Kulwant Singh Khalsa
(CA STUDENT)
(105 Points)
Replied 03 January 2013
[ Deductions from income from house property.
24. Income chargeable under the head "Income from house property" shall be computed after making the following deductions, namely:—
(a) a sum equal to thirty per cent of the annual value;
(b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital:
Provided that in respect of property referred to in sub-section (2) of section 23, the amount of deduction shall not exceed thirty thousand rupees :
Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed
[within three years from the end of the financial year in which capital was borrowed], the amount of deduction under this clause shall not exceed one lakh fifty thousand rupees.
Explanation.—Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years:]
[Provided also that no deduction shall be made under the second proviso unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, or, conversion of the whole or any part of the capital borrowed which remains to be repaid as a new loan.
Explanation.—For the purposes of this proviso, the expression "new loan" means the whole or any part of a loan taken by the assessee subsequent to the capital borrowed, for the purpose of repayment of such capital.]
Adithya Kiran.A
(Chartered Accountant)
(46 Points)
Replied 04 January 2013
Thanks to one and all. I have one more concern regarding this provision that is Sec.24(b) insists interest certificate only with respect to Second Proviso which is apparently applicable only for self occupied properties. Why it is so? I felt that ultimately we have to substantiate our claims to the Assessing officer. If that is the case why they have explictly insisting on certificate for self occupied property but not let out property. Does it mean that we no need to submit any proofs for interest in respect of let out property? I dont think so. Can any one guide if my interpretation is appropriate?.
CA Gaurav Verma
(Chartered Accountant)
(65 Points)
Replied 04 January 2013
Yeah, After reading the explaination litterally, it can be said that the deduction still allowable without certificate from the lender in case of let out property. However, as per Notes on clause - Income tax for Finance Act, 2002, it states that explaination is applicable to both properties (Let out or Seld occupied) which are constructed / acquired from borrowed capital.
Refer : - https://indiabudget.nic.in/ub2002-03/fb/bill71.pdf
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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