Subvention scheme

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269 Points Posted on 17 November 2019

Hi.

If builder is paying interest on home loan directly to bank on behalf of buyer as per subvention scheme , will it be considered as interest income for the buyer. Builder has deducted TDS on this interest payment to bank  u/s 194A and it is reflecting in buyer's 26 AS. If yes, then why is it interest income of the buyer?
 

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On 17 November 2019 at 18:57 Report
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SEO Sai Gr. Hosp.
121407 Points Posted on 18 November 2019

Because the loan is taken by the buyer of the property, and the interest payment is liability of the loan borrower.

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On 18 November 2019 at 14:41
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5751 Points Posted on 18 November 2019
Yes, the interest payments made by builder on behalf of purchaser is interest in the hands of purchaser. the same can be claimed as deduction as either pre construction period interest or interest paid on borrowed capital by purchaser
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On 18 November 2019 at 22:13
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10683 Points Posted on 18 November 2019
@ Shalini

What about TDS part of query ? TDS under 194A in interest payment to bank !!! pl explain what exactly is about TDS ??
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On 18 November 2019 at 23:54

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