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Interest u/s 24

Tax planning 574 views 4 replies

CA Manasa

1479 Points Joined November 2007

Mrs X took a Loan of Rs 5 Lacs for Constructing an house property for which she is the registered owner. The monthly Instalment of the Loan both principal and Interest was being paid by Mr X. Now can the deduction be allowed to Mr X or Mrs X . If so Why???

Thanks in Advance

Replies (4)

CA. Gurdeep Singh Chawla

C A

7080 Points Joined June 2007

deduction allowed to Mrs X

Rajeev

www.rkmco.com

985 Points Joined September 2009

deduction will be available to Mrs X , even if she has not contributed a single rupee for repayment .

Deduction is available to the person who has taken the loan . Repayment is not even mentioned in sec 24

Guest

Interest on borrowing can be claimed as deduction only by the person who has aquired or constructed the property with borrowed fund.In other words, the relationship of borrower and lender must come into existence before it can be said that any amount or any other money is borrowed for the purpose of construction, acquisition, etc.of the house property by one person to another person and there must be a real transaction of borrowing and lending in order to amount to any borrowing.