Housing loan interest from family

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You can claim tax deductions of up to £200,000 on interest paid for housing loans taken from family or friends, under Section 24. To do this, you'll need an interest certificate from the lender. While principal repayments under Section 80C and additional interest deductions under Section 80EE/80EEA aren't applicable, a simple signed certificate from the lender, along with bank statements for proof of payment, should suffice.

Nisha Agarwal

Nisha Agarwal (Querist)
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24 February 2020 Hi, as per my understanding interest on the housing loan taken from family and friends can also be claimed under s24 as a deduction st limit of 2lacs. However an interest certificate is needed from the person from whom loan is taken. Can you please advise how this certificate can be obtained?

swasti

swasti (Expert)
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25 February 2020 Your understanding is correct. Deduction for Interest paid on Loan taken from Family/Friends is available U/s 24 upto Rs 2 Lakhs. Howsoever, additional deduction for Interest U/s 80EE/80EEA is not available and Deduction U/s 80C for principal payment is also not available.
You make take a certificate from the lender for payment of Interest & Principal for the year. Also keep ready the bank statements, to substantiate the payment, if required in case.