Loan Reimbursement

bank does not offer housing loan for repayment to relatives, 

housing loan available only if bank will pay direct to builder/ developer.

agree with above experts that banks not give loan for repayment of loan from relatives.

As per Circular No. 28, dated 20.08.1969, where a fresh loan has been raised to repay the original loan if the second loan has really been used merely to repay the original loan and this fact is proved to the satisfaction of the Income Tax Officer, the interest paid on the second loan would also be allowed as a deduction.

But in your case the fist loan is a hand loan which may not be considered as loan by income tax dept. Hence it is advised to take bank loan and then acquire the property.

i agree with ranjan, not only bank loan even any approved financial institution loan like lic housing loan etc... can get the benefit of Tax

Thank you very much for the valuable information Mr. Ranjan.

My situation is somewhat similar to Harsh. In my case however, I will be repaying a loan taken by State Bank of India with another loan (in a different homeloan segment) by the same bank. The bank has the provision for reimbursing upto 75% of the money spent on buying the property (Sale consideration plus the registration charges) if you apply for a loan within 1 year of buying that property.

Since, my first loan is a loan by a Bank itself, will it be considered for availing tax benefits by the income tax department?

Thank you..

In case of Anil, he will be entitled for the tax benefits in light of the circular No. 28 dated 20/08/1969 as explained by Ranjan. Only thing need to be considered is the purpose of loan should not be altered and it must be for  housing purpose...