CA Pratik Sirwani (Chartered Accountant) (127 Points)
24 March 2011An assessee has taken an unsecured loan from a friend for purchasing House property. Further, he takes a loan from a bank which he uses for repayment of loan which he had taken from a friend. In this case, the assessee pays interest on unsecured loan taken from friend as well as interest on loan taken from bank. So can he claim deduction U/s 24 in respect of both the interest payments.....???
CA Saiyum khan
(Practicing CA)
(685 Points)
Replied 24 March 2011
interest u/s 24 can be claimed only if the loan is taken from the bank or govt. authorised financial institutions for the purchase of house. So in the given case the interest by the assessee can not be claimed u/s 24.
However if the assessee is carrying out the busniess of letting out the property than he can claim the interest paid by him.
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