While computing income from House Property, one of the deductions is , interest paid on borrowed capital, and it includes loan taken for purchase, construction, repair, renewal etc..so, if a personal loan is taken for the purpose of reconstruction or renewal, then is the interest paid on such personal loan allowed to be deducted as it is for the above mentioned purpose? If not then why? If yes then, the assessee can evade tax by misrepresenting the amount of loan taken for some other purpose and state that it belongs to the house propoerty renovation?
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DEDUCTION FROM INCOME FROM HOUSE PROPERTY
Replies (2)
Hi Vignesh,
Yes the assessee can claim deduction.
If a Assessee takes a loan the banker will ask for the purpose of loan & the person states it is for reconstruction of House Property then he can use only for that purpose. Likewise if an Assessee takes loan for his marriage then he use that loan amount only for the marriage purpose. So the Assessee cant claim deduction if he has taken for anyother purpose.
Thanks & Regards
R Shriram
Agree with the above and also if you have taken loan for construction or renewal etc. you will have to construct or renew.
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