Interest on Housing Loan

Loan taken from relative is allowed as deduction U/S 24(b).

Regarding documents I don't think that any document is required while filing Income Tax Return as new ITR's are annexure less returns.

yes u can take

Yes It is allowed
 

yes,u can claim

yes

yes you can, it is advisable to pay the interest by account payee cheque and deduct tax @ source on interest payment

Tuesday, September 23, 2008

From

Vishram Ratnuji Modak,

Santacruz (East), Mumbai.

Cell # 9969 354 690

Email: vishrammodak @ gmail.com

vishrammodak @ yahoo.com

Sub: Reply to your query & My Sublime Wishes

Respected Dear Ms. Neha Phadke Madam,

1.         Good Morning, We are all fine here, I do hope you and your loving family are all fine & great.

2.         I am awfully happy to learn that you have mulling over sanguinely towards your studies for your CA. Further I do believe with certitude you shall be a “Professional Chartered Accountant”. Secondly the depth {Your Query} with which your genial goodself is pursuing CA is really commendable.

3.         This is germane to your query, Yes Loan taken from relatives and used for “specified purpose” inter-alia construction of house, purchase of house is a valid loan as per the provision of Sec 24 of the Income Tax Act, 1961.

4.         Accordingly Interest paid on such loan even though taken from relatives and or any other person is allowed as a deduction u/s 24(b) subject to the limits so specified i.e. In case of a SOP its Rs.1,50,000/- per previous year and in case of LOP its without any maximum limit per previous year provided such loan is taken after 1/4/1999.

5.         To claim the captioned deduction u/s 24(b), legally speaking it should be a transaction valid & acceptable in the eyes of law in case it has to be proved in the  Court of Law. Ergo, such loan lending & borrowing {Loan Agreement} should be on a prescribed amount of Stamp Paper duly specifying the loan amount, the purpose, the tenure, the rate of interest as well as the payment schedule. To sum up, it should be in the same way if you would have taken a loan from a Housing Finance Co. or a  Bank.

6.         Needless to state do feel free to contact me for any sort of co-ordination, it will be an honour for me and rest assured it will be acknowledged sanguinely. May the Great God shower his sublime benedictions on your kind goodself and on yours loving family.

Take Care,

With Respect & Best Wishes,

Vishram R. Modak

CA Final Student

Yes it can be claimed

HELLO,

YES, YOU CAN CLAIM FOR TAKE DUDUCTION U/S 24 (b). BUT WHEN YOU TAKE LOAN . IT SHOULD BE BY CHEQUE  OR DRAFT BECAUSE YOU CAN'T TAKE LOAN IN CASH MORE THAN 20000/- SO, WHEN YOU GIVE THE PAYMENT OF INTEREST, IT SHOULD BE GIVE BY CHEQUE OR DRAFT. AFTER TAX DEUDTED  @ SOURCE. THEN YOU TAKE THIS DUDUCTION. 

HELLO,

YES, YOU CAN CLAIM FOR TAKE DUDUCTION U/S 24 (b). BUT WHEN YOU TAKE LOAN . IT SHOULD BE BY CHEQUE  OR DRAFT BECAUSE YOU CAN'T TAKE LOAN IN CASH MORE THAN 20000/- SO, WHEN YOU GIVE THE PAYMENT OF INTEREST, IT SHOULD BE GIVE BY CHEQUE OR DRAFT. AFTER TAX DEUDTED  @ SOURCE. THEN YOU TAKE THIS DUDUCTION. 

Individual cannot deduct TDS.

Yes I do think as an individual TDS cannot be deducted from the payment that you make to the relative. The whole transasction should be clear in the face of law. There should be necessary basic documents made availaable.