Hi every one!
If any Individual recived any amount as a loan for his Let Out property from any other Individual other than banks & Financial Institutions, whether he can claim the amount of Intrest paid as a deduction to his LOP Income??
If it is allowed what if the rate of Intrest is much higher than normal Interest rates prevailing? say may be loan took from related party.
Please tell me something in this regard.
In my view.
There is nothing in Section.24 that prohibits the deduction of interest if loan is borrowed from individual. Hence you can claim this deduction. However, Sec80C has specified clearly that principal repayment can be claimed only when the loan is borrowed from an approved institution.
Hope this clarifies.
We can wait for other views as well.
Agreed with Dhawal.
The only point of caution is you have to produce a certificate from loan giver about the interest amount paid to him. Naturally, the PAN of the loaner will be relevant and so will be the need for an agreement. Also, the loan should be for repair/recpnstruction/purchase/acquisition etc . You should have adequate documentary evidences if there is a scrutiny assessment.
Regards,
CAclubindia
