SEC 24 OF THE INCOME TAX ACT

Dear Karthikeyan,

We have discussed this thing many a times........that Under Sec 24 deduction of interest is allowed even if amount is borowed from Friends & relatives....No doubt about it...

But it is advisable to take a loan from bank., employer, etc so that repayment of principal can also be claimed as deduction u/s 80 C, because it is a specific mandate of 80C that Loan should be borrowed from Bank, employer, etc..

So in the present case YES deduction of interest will be allowed on loab borrowed from FATHER

Dear Kartikeyan & Aamir,

The question and it's answer published in today's Ecomomic Times are not clear in itself. The person in question is living on rental basis and has taken loan from his father. Is that person owner of some immovable house property or not? If he is not owner then there is no question of deduction of interest u/s-24.

agree with CA. Satendar kumar...

In the question there is no relevance for section 24....

The individual is living in a rented house and wants to claim the loan repaid???

loan taken for what purpose ????

If the loan is taken for pur or const a house i.e. let out since he is staying in a rented house...

he can claim ded u/s 24B for interest on loan.....

Dear Sir,

I totally agree withwhat you have said, when a person has no income from house property, the question of using sec 24 does not arise, is it not, I  feel the reply given in ET- was right, that is the reason I  brought it for discussion so that, if I am wrong, I could correct my self,  I think Mr.Amir did not understand my question and has generally said that interest payable to  relatives are also deductable U/s 24.

many thanks for your response,

regards

karthi

Originally posted by : CA.Satendar Kumar
	Dear Kartikeyan & Aamir, The question and it's answer published in today's Ecomomic Times are not clear in itself. The person in question is living on rental basis and has taken loan from his father. Is that person owner of some immovable house property or not? If he is not owner then there is no question of deduction of interest u/s-24.

Dear Karthikeyan,

Deduction of Interest can also be claimed in respect of a Self Occupied Property, Now in this case there won't be any Rental Income...

Specific limits are there Rs. 1,50,000 & Rs. 30,000/-

Plz reply if u meant something else..............

Dear guys,

continuing from where the query has reached, its clear tht in the qstn, the purpose of loan is not given. Also, its not mentioned in the question tht is there any interest paid actually. From the nature of it, its from Father and there are a higher chanvce for the loan being an interst free loan. 

So we need to assume sumthing. I am assuming the loan is interest bearing. and also, it may be possible that he is currently living in a rented place and the loan amount may be used for the construction of a house. So, as currently there is no income under the House Property head, he can cliam the interest paid during these periods upto the date of construction as pre construciton period interest. I hope my guess has some sense.

How can you claim deduction u/s 24 for the rented house you are living in?.....

Yes, U can claim the deduction of interest and principle amount.

but u should inform the above fact to the commissioner of IT in writting. that you are taking a loan from your father and the rate of interest.

regards

manish

The question of deduction u/s 24 a&b arises only when

A) a person owns house property

AND

B) loan has been taken for reconstruction or renuel f such property

 
the fact of the case does not clearly indicate that whether the person is owning property or not .

so it definately very simple that if that person is owner, then he surely can claim deduction.

BUT if he is not owing property then , i afraied hat he won't be able to claom deduction.

let me tell you one related deduction which a person can claim if he is NOT OWING property,

he can claim deduction u/s 80GG for rent paid by him  under IT Act.
 

Just take the deduction..there is no doubt at all..If the property is registered in the name of the person who is taking the loan from father then he can obviously take the deduction for both principal and interest. And what if he is staying in a rented house? what difference does it make..does sec.24 says that the person has to LIVE in that house..?? no...if i m purchasing a flat for an investment purpose then too i would get the deduction. So simple...

Thank you all of you to have responded to my question, i am much obliged

karthi