Can I claim a section 24 deduction for interest paid on a personal loan used for home renovation. If so, what documents should be attached to the RTI. Not being aware of the rules, I filed my RTI without claiming it last year. Can I claim the deduction now?

-Rajendra Pawar

By Balwant Jain, Tax and Investment Expert

To claim an income tax deduction under section 24 (b) for interest paid on money borrowed for the purpose of purchase, repairs, renovations, etc. from a house, it is not necessary that the money has been borrowed as mortgage loan. Interest paid to your friends and relatives in respect of money borrowed for the purposes specified above may also be claimed under Section 24 (b). You must prove the actual use of the personal loan for the purpose of renovating your property to qualify for the deduction. You can easily prove this by linking the personal loan credit to your bank account and its corresponding use to make payments for renovation etc.

While you are not allowed to attach a document to your ITR, you should still retain the documents in case your case is selected for detailed review. You must keep a copy of the bank statement for the relevant period as well as the personal loan statement showing the interest paid. You must also keep the invoices for the renovations carried out.

If you haven’t claimed the interest paid on a personal loan deduction in the past year on your tax return, you can still do so by revising your ITR.

(The opinions expressed by the expert are his own.)

To subscribe to Mint newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our app now !!

Source link

About The Author

John R.

Related Posts