I have taken personal loan for my father business and home construction. The land is on my mom's name. My father is cosigner for the loan. Am I eligible for the tax exemption if yes then under which section.
Thank you for your help!!!
Am I eligible for the tax exemption if yes then under which section.
Generally Personal loans are not eligible for tax exemption. Only housing loans from qualified institutions are eligible for tax deduction.
As per the income tax act; The house should be in your name. The home loans taken from recognised institutions are fully qualified under section 24B and 80C. This means you can claim Interest exemption under 24B and Principal repayment under 80C. The Act also specifies that loan can be taken from friends/relatives for construction of property and will be eligible for Interest exemption under 24B only. The principal will not be eligible for exemption under 80C. Read the FAQ from Income Tax India.
There has to be certificate showing how much interest was paid on the said loan. Further there should be records/receipts on how the money was spent.
There is difference of opinion amongst CA. It is best you take a professional advise.