Deduction over interest on housing loan paid to parents

Deduction on principal amount

You can get tax relief on your principal amount if it is borrowed from recognized lender such as bank, financial institute or from your company where you are employed. Claim can be made for principal amount of housing loan together with other expenses such as registration fee; stamp duty etc from the financial year in which events like purchase, reconstruction, completion etc occurs. However you will not be eligible for tax relief, if principal amount is repaid before construction of your house. If you paid after completion of construction, you can claim maximum of Rs 1lakhs in a year to deduct from your taxable income.

Interest  paid on housing loan is loss under income from house property, if u have no income under house property. 

In order to claim the deduction, an individual should provide a certificate from the lender to whom the interest is payable on the capital borrowed, specifying the amount of interest payable.