06 July 2014
Housing Loan Interest: In case of Housing Loan to Bank employees generally two accounts are maintained • One for Principal • One for Accrued Interest First principal is adjusted from the repayment and after wards, interest is reduced.
Now, what would be the treatment in Income Tax return:
• Should we take the deduction of total repayment amount as principal repayment in 80 C ( Up to Rs. 1 Lac ) and the accrued interest too U/s 24 B ( Negative income up to Rs. 1,50,000).
The treatment in Income Tax can not be differentiated for Bank employees, the treatment of loan repayment in books of accounts is not pertinent for bifurcating principal and interest amount. It has to be construed from the Loan agreement and repayment statement. Accordingly deductions to be claimed u/s 80C and 24(b)
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