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Tax adjustment of soft home loan by employer

srinivas (Manager) (39 Points)

10 January 2013

I have taken a housing loan from a bank 5 years ago. This year i repaid the bank loan from a soft laon taken from father. My company is not interested to consider my loan from father and adjust the same in tax paid. I was told to go through return route. My query is

1. Can company deny taking cognigence of income from house property, specifically on a soft loan(loan based on a promissory note).

2. What is the responsibility of of the company when considering the interest payment on a soft loan.

3. Will the onus of proof lies on individual or company in this case?

4. What are the rceipt and documents required as proof for filing ITR for such a soft loan.

Learned friends, please enlighten me.

Thanks in advance.

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4 Replies

CA Ankit Totla (Practicing Chartered Accountant) (469 Points)
Replied 10 January 2013

who advised you to change to soft loan when the act clearly mentions that interest and principal repayment of home loans are allowed only in case of Housing Loans taken from banks or FII..

You are totally ineligible for the deductions and your employer is absolutely right.

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kavitha (studying final) (830 Points)
Replied 10 January 2013

Originally posted by : CA Ankit Totla
	who advised you to change to soft loan when the act clearly mentions that interest and principal repayment of home loans are allowed only in case of Housing Loans taken from banks or FII.. You are totally ineligible for the deductions and your employer is absolutely right.

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 10 January 2013

Ankit

I would disagree with you partially.

Interest paid on loan taken from any person , ie , other than from Bank/FI is allowed as deduction in income computation. Only principal is not available for investment/deduction under section 80C.

Hence, this is to be considered for calculation of TDS by employer under section 192.

The tax payer has to furnish a certificate to the employer disclosing the interest paid and identity of loan giver.

Let me know your considered observation on this.

Regards,

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srinivas (Manager) (39 Points)
Replied 11 January 2013

Thank you for the response. I read this that i can take a soft loan and pey interest on the same and claim tax deduction for the same. My post is to confirm the same.

I would like to know your openion on the other queries, ie 2,3,and 4.

Thanks in advance.