I had taken loan from my father alongwith loan from ICICI Bank for a house. As per Income Tax Act, Interest is to be claimed each year ON ACCRUAL BASIS (i.e. even if not actually paid) Even when the books are maintained on CASH BASIS. Can I follow this rule & claim interest on loan taken from father when Not actally paid and in this case, can my father show interest received in the year wherein the interest is ACTUALLY RECEIVED
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Interest on Housing Loan taken from Relative
Replies (1)
SG,
The method of accounting U/s 145A does not apply to House proerty income.
In my opinion you may not get benefit of the amount paid to your father.Though the provisions says interest on borrowed capital is allowed as deduction u/s 24.
What amount of Interest paid to ICICI bank is eligible to get the benefit.
The proviso says the 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.
Here is the link of the provisions of IT Act 1961 for your ready reference.
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