Tax query - home loan taken from parents

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Hitesh (Querist)
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17 January 2012 I have taken loan from my parents to repay the existing housing loan. And i am paying interest to my Parents on regular basis.

My query is how i can claim deduction of interest paid to parents. As per section 24 loan can be taken either from financial institution/banks/parents/relatives/frends.

In this scenario i can not claim Principal paid to parents u/s 80c but i can claim interest deduction.

Please confirm my above understanding. Also let me know what proofs i need to submit to my employer to prove this.Pl note i have not entered into any agreement with my parents on this.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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17 January 2012 You can claim deduction of interest paid to your parents.

For this purpose, you wil have to obtain a certificate from your parents specifying the amount of interest paid.

Also you will have to prove the flow of money:

1. Loan from your parents.
2. Payment of interest.

These can be substantiated from the bank statements.

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CA. Krishna K Neeraj

CA. Krishna K Neeraj (Expert)
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18 January 2012 Agreed with Siddartha

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