Home loan interest paid to Individual only and not any Bank

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This discussion clarifies whether interest paid on a home loan taken from an individual, rather than a bank, is eligible for income tax deductions. The consensus is that such interest payments can indeed be claimed as a deduction under Section 24 of the Income Tax Act. This applies as long as the loan was used for the construction or purchase of a house and the construction is complete or possession has been taken.

Bhai

Bhai (Querist)
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15 February 2023 Sir

A person is claiming Home Loan Interest paid to an Individual for IT purpose.

But he has not taken any Home Loan from any Banks.

Whether this interest paid to individual can be considered for Income Tax working.

Thanks.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 February 2023 Yes, home loan from individual is eligible for income tax deductions.

Bhai

Bhai (Querist)
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15 February 2023 Sir

Thanks.

But he has not taken any loan from banks. Then also is it exempted.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 February 2023 Interest repayment for a home loan that is taken from friends or relatives can be claimed as a deduction under section 24. The deduction can only be claimed when the construction of the house is complete, or the possession is received by the individual. The income tax act does not specify clearly that deduction will be available only for loans from specified banks.

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