Deduction over interest on housing loan paid to parents

Tax planning 517 views 2 replies

kapil

Asst Manager

30 Points Joined January 2011

Happy New Year ,

I have one small query that interest on housing loan paid to parents is tax deductible under Income Tax Act but not the principal payment.

My present company is not allolwing me this deduction (on interest) as per their internal policy.But my stand is that when something is legally deductible under any law how can they deny the same making as their internal policy.

I would request please assist me what should I do in this regard how how to take discussion forward with them.

Please give me specific provision for going with strong base.

Regards

Kapil Gandhi

Replies (2)

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

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.

laxman suthar

Asst. Manager Taxtation

329 Points Joined January 2009

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.