Tax query - home loan taken from parents

This query is : Resolved

Hitesh (Querist)
Follow

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)
Follow

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.

Message likes : 1 times