Deduction in income tax

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amit (Querist)
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27 March 2012 plz Tell me whether an individual gets a deduction in income tax on loan taken from a family member or relative. pls tell the relevant section & provision. its urgent plz give the answer .

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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04 April 2012 1. If the loan is a housing loan and interest is paid on such loan, then the interest will be allowed as deduction.

However, the principal repayment shall NOT be allowed as deduction.

2. If the loan has been taken for business purpose, then the interest shall be allowed as deduction from business income.
However, interest should be fair keeping in view the market rates.

amit

amit (Querist)
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05 April 2012 thanks siddhartha for resolving my query.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 April 2012 You are welcome. You should use the thanks button to convey your thanks.

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