Clubbing of interest from personal loan and home loan

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A P Arun (Querist)
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05 July 2016 I have opted Personal Loan from HDFC Bank and Home Loan from LIC for my first home construction in FY 16. I am aware that I can show the Interest deducted from Home Loan under Section 24(b), similarly can I show the interest deducted from personal loan under section 24 (b). If yes, please let me know if I need to submit any supporting documents while submitting it. Thanks.

ASHWANI DHANUKA

ASHWANI DHANUKA (Expert)
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05 July 2016 You can claim only int on home loan.

Amol S Joglekar

Amol S Joglekar (Expert)
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05 July 2016 interest on home loan can be claimed. Interest on personal loan can NOT be claimed from house property income

A P Arun

A P Arun (Querist)
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05 July 2016 I read it in a blog saying that " Section 24 - income tax benefit on interest on personal loan. You can claim income tax benefit on personal loan under this section, when the same is used for purchase of property, repaired, refurbished or renovated. Overall interest benefit is 1.5 lacs for tax exemption." Please clarify. Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 July 2016 If the personal loan is utilized for home construction, 24(b) deduction can be claimed. No supporting document required while filing the return. Keep it and produce it when asked for.

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Amol S Joglekar

Amol S Joglekar (Expert)
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05 July 2016 When asked for by the income tax department, you need to prove that the PERSONAL loan has been used to construct/purchase the house property. If you are able to do that, then you can do so. (Just a small addition, if you are a salaried employee, the employer MAY not consider the same for TDS purposes)

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ASHWANI DHANUKA

ASHWANI DHANUKA (Expert)
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05 July 2016 Be sure that LIC home loan amount plus its margin is substantially lower than Cost outlay of home. So that you can establish that the balance amount towards construction was financed by proceeds of Person Loan.

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Amol S Joglekar

Amol S Joglekar (Expert)
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05 July 2016 No matter even if the margin is FINANCED with personal loan......the only point could be Loan amount can NOT be greater than COST of house.

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