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Deduction for interest on housing loan being allowable on ‘payable basis’ can be claimed, though actually not paid!

Today’s Tax Clues deals with some very interesting issues raised by readers in relation to deduction for interest and repayment of housing loan.

Query:  I am desirous of investing in a house and need a Housing Loan of Rs.20,00,000.  An institutional loan would mean adhering to a strict schedule of interest and installment payments and hence I am considering the option of availing such loan at 7.5% interest per annum from my Senior Citizen father, who would have no objection in granting me accommodation in payments so as to suit my liquidity convenience.  Being in the top tax bracket, I would like to know if I can avail tax deductions for housing interest and installment payments, if they are not actually paid during the year but deferred for payment in the later years as per my convenience.    

                                                                               -Swapnil Vyas (more…)


Cost Inflation Index for FY 2011-12 notified at 785 reflects a rise of 10.4% over last year’s 711

             Readers are aware that for purposes of computation of long term capital gains, a taxpayer is entitled to compute Indexed Cost of Acquisition, which is determined with reference to the Cost Inflation Index (CII) notified by the Government for the relevant financial year.

             Vide its Notification No.35 of 2011 dated 23-06-2011, the Central Government has notified the Cost Inflation Index (CII) for FY 2011-12 at ‘785.’ The CII for FY 2010-11 was ‘711.’ The increase of 74 points during the past one year reflects a rise of 10.4% in the Cost Inflation Index, also confirming the fact that the common man has continued to suffer under the double digit inflation impact! (more…)


Interest Deduction available for Second Housing Loan?

Several readers have been asking this common question, “Can a taxpayer also avail tax benefits in respect of his investment in a second house, when he is still availing the same in regard to his first one?” Let us deal with this issue today. (more…)

Housing Interest evokes Evergreen Interest!

Deduct Now, Pay Later, But Save Tax For Sure!

Deduction of interest on housing loan has been of evergreen interest for readers since it provide focus on valuable opportunities for income-tax saving. Replies to the following queries provide an interesting insight.


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