CA Vaibhavi (Chartered Accountat) (88 Points)
06 July 2012
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 06 July 2012
CS RAJESH C.CHOUDHARY
(ASSISTANT MANAGER)
(14607 Points)
Replied 07 July 2012
Dear Vaibhavi,
yes it would amount to deduction as the loan is against the person.where as i think
where as the amount paid by the employer is been treated as his salary income.
Ankush sharma
(Auditor Article Assistant)
(816 Points)
Replied 07 July 2012
No Assessee cannot claim deduction of 8%
Second proviso of sec 24 (Interest payable by the assessee, here in this question only 4%interest is payable by him),hence assessee cannot claim full deduction of 12% check bare ACT
nitin suvarna
(C.A FINAL)
(828 Points)
Replied 07 July 2012
According to sec 24 ,interest is allowed as deduction on accrual basis,(paid or payable) & according to me in this case it should be allowed
Neeta Kishorbhai Jethmalani
(Article assistant)
(53 Points)
Replied 07 July 2012
As per my opinion , entire 12% interest can be claimed as deduction u/s 24 (b) of The Income-tax Act, 1961 as we have to note here Interest payable on borrowed capital is allowed (Interest paid is irrelevant here).So, though 8% interest is paid by employer, employee can claim entire 12% interest on housing loan as deduction u/s 24 (b) of The Income-tax Act, 1961.
CA. Nitesh
(Assistant Manager (Finance and Accounts))
(491 Points)
Replied 07 July 2012
| Originally posted by : Neeta Kishorbhai Jethmalani | ||
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As per my opinion , entire 12% interest can be claimed as deduction u/s 24 (b) of The Income-tax Act, 1961 as we have to note here Interest payable on borrowed capital is allowed (Interest paid is irrelevant here).So, though 8% interest is paid by employer, employee can claim entire 12% interest on housing loan as deduction u/s 24 (b) of The Income-tax Act, 1961. |
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agree with neeta
CA Deepak Garg
(Consulting )
(95 Points)
Replied 07 July 2012
in my opinion interes @ 12% shall be allowed, because interest shall not be allowed as mention in sec. 25
Section 25 notwithstanding anything contain in section 24, interest shall not be allowed only in the following circumstances
1. Any interest payable outside india.
2. No tax has been paid or deducted at source on such interest, and
3. There is no person in india who may be treated as an agent under sec. 163 in this respect.
So, 12% shall be allowed as per section 24(b) of the income tax act.
Regards
Deepak garg
snskrishna chaitanya
(analyst)
(23 Points)
Replied 07 July 2012
12% interest is allowable. in effect the interest is paid by the employee only.
CA.Karthikeyan G
(M.Com)
(201 Points)
Replied 07 July 2012
My Opinion :
1.Interest paid by the owner who possess the right is deductible.Hence Interest Paid by employer is not dedutible in the hands of employee u/s 24(b).
2.Employer can claim this interest payment as deduction as there is a commercial expediency exist through encouraging the employee by paying the part of interest.
Interest taxed in the hands of employee and deduction to employer.
CA.Karthikeyan G
(M.Com)
(201 Points)
Replied 07 July 2012
My Opinion :
1.Interest paid by the owner who possess the right is deductible.Hence Interest Paid by employer is not dedutible in the hands of employee u/s 24(b).
2.Employer can claim this interest payment as deduction as there is a commercial expediency exist through encouraging the employee by paying the part of interest.
Therefore,Interest paid by the employer taxed in the hands of employee as perquesite and deduction to employer.
CA.Anupriya Agarwal
(Practising CA)
(110 Points)
Replied 08 July 2012
It can be done lyk entire 12% is paid by employer and 8% is reimbursed to him by employer, which can be taxed as perquisite and assessee can claim entire 12% as deduction u/s 24(b).
Correct me if m wrong,
Regards
MAHESH GARG
(AUDIT EXECUTIVE)
(334 Points)
Replied 08 July 2012
In my opinion full 12% can be claimed as deduction.
8% interest paid by the employer is no doubt to be treated as perk taxable in the hands of employee as salary
also at the same time it's indirectly expense of the employee because nothing is been received in actual in the hands of the employee.
For example,
Take this transaction as if the employer is giving 8% to employee and in return employee is paying entire 12% interest on the loan.
I think in this case no doubt arises as to allowance of 12% interest as deduction
Also to avoid doubt that may arise in your mind i would like to explain the loan provided to employee at a concessional rate
In the same transaction if loan was provided by the employer at a concessional rate of 4% to the employee instead of prevailing market rates of 12% then ofcourse only 4% interest was allowable as deduction because In this case neither the Employer have to pay any interest of differential of 8% nor the employee.
I think you all will agree to it.
Also I welcome your replies if you don't agree with me and want to correct me.
Thanks
Ramakant Juvekar
(Asst. Manager)
(33 Points)
Replied 09 July 2012
In my opinion, the entire interest of 12% can be claimed as deduction. An assessee cannot be put to double taxation of the same income. As employer had paid 8% of the interest portion and adding the same as perquisite in the hands of the employee, would definitely mean that the payment of interest by company is just on behalf the employee and it should mean that the same is paid by the employee only.
In case, it had not been added back as perquisite, the question of claiming it as deduction won't have arisen. It would be unjustice to put an assessee to double taxation, (i.e. adding 8% as perquisite under Salary and non-allowability of interest from income from house property).
When it was deducted by company as expenditure, the same is added as perquisite in the hands of the employee. The same way, the said interest is shown by the financial institution as income, corresponding interest component cannot be denied in the hands of the assessee as expenditure / deduction.
Hence, the entire interest of 12% would be allowable as deduction.
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