Home Improvement Loan Transasctions

Ashish

Look in case on individual , he can make cash payment to any one. Regarding of using the amount of loan to any where , i would like to say that after approving of loan you can use anywhere there in no disruption by Income tax deptt . It is the matter between you & Bank........May  be bank can't disburse you full loan becoz bank employee check the site before approving the loan.................

Thanks sourabh for answering, bank is ready to approve the full loan, i am just worried how to show the transactions in income tax department which are made in cash to anyone

 Dont worry dear , Income tax doesn;t require the usage of loan even you can use loan for cash payment or for personal purpose . It is the matter between you & bank. Income tax depptt. require only interest certificate which u claimed in return...........

Dear Ashish,
One correction interest deduction is restricted to Rs 150,000. I think there is a typo in your statement which states it is Rs 15,00,000. Try to pay directly to the vendor for the material and to the labourer for the labour cost. Please preserve the bill as the ITO might ask for the same as you would show the renovation cost as additions to Fixed asset.

Sanjay that's a typo error. but as i mentioned before labours or small contracters (thekedars) will not provide any bills. And as sorabh stated they need the income tax certificate... in which principal paid and interest paid amount is mentioned.

Sanjay

In case of individual  , there is no need for cheque payment OR bill details. What required as i menioned that  only interest certificate on the basis of which you can claimed the interest in the return...............................

SORABH

Dear Sorabh, Due to the Home Improvement Loan cost of the property goes up by that amount. Which can be used for indexation purpose once the person sell that property that time the assessing officer will ask for the additions made to House Property right. 

At the time of selling why assessing officer will ask... i sell the property at any cost they have to do with their loan amount.

Dear Sanjay

As per capital Gain there is two indextation i.e. one is for Cost of Acqusition & another one is Cost of improvement .

As far as in ur case Cost of inprovement , when you sells ur property then formula is 

COST OF IMPROVEMENT / CII of year in which impovement took place X CII of year in which assets are transferred...............

And for addition certificate , you can took a certificate from architect OR may be you have already taken a certificate for approving the loan . You can use the same for Addition certificate.....

Ashish What I was referring to is the indexation benefit which ones get for home loan improvement. If a person is claiming a deduction (interest benefit/ capital indexation) assessing officer is entitled to ASK for any document. It is better to have the bills from the labourers/contractors for safety purpose so that you get complete deduction.

The home loan is only using for home purpose. Dont use for other purpose. Bcz its very difficult to handle to using other purpose.

https://www.directhouse.com/

The lender,i.e, the bank always ensure the enduse of the loan amount. Moreover, the AO may ask to explain and prove the investment. In case the AO is not convinced then the deduction may not be allowed.

Ramesh this is what I was trying to explain to my other friends on the board.