Can I take home loan from a relative? Can I still claim the tax benefits?
Under Section 24 of the Income Tax Act, 1961, tax deduction benefits will be available only on the interest paid
Can I take home loan from a relative? Can I still claim the tax benefits?
Ramesh Ahuja, Gwalior
Yes, you can take a home loan from your relatives. Under Section 24 of the Income Tax Act, 1961, tax deduction benefits will be available only on the interest paid. However, no tax deduction benefits for capital repaid will be available under Section 80C. There are specific procedures to be followed while agreeing on the loan. You should consult a local lawyer, who specialises in property matters, to draft a standard loan agreement so that all details are clear to all parties.