repayment of house loan

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  1. ZED

    ZED Well-Known Member

    Shoban Sir, the repayment schedule will not show any other charge as interest charge. For income Tax Act we have specific definition which should be applied for tax purposes.

    Pentagram Properties Private Limited vs. DCIT [ITAT mum] (in this case processing fees was of 55 Lacs and was considered as interest)

    Chintamani Hatcheries (P) Ltd. vs. DCIT (2000) 75 ITD 116 (Pune) (SMC) held that processing fee for obtaining a loan is a service fee and has to be allowed as interest in view of the definition in section 2(28A)

    DO NOTE that inorder to claim deduction u/s 24(b) you have to produce the certificate from the person you have borrowed the money, insist them to give details of ALL the expenses charged by them , if that certificate does not include this processing charge or prepayment charge or service charge or any other fees etc then the AO might not give you deduction for that.
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