Tax Benefit on Home Loan Processing Fees and Legal Fees allowed ?

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  1. cagauravgoyal1983

    cagauravgoyal1983 New Member


    I need to check whether i can avail tax benefit on the amount of home loan processing fees paid to bank and Legal Fees paid to bank lawyer ?
  2. ZED

    ZED Well-Known Member

    You can claim deduction for interest u/s 24(b) read with S.80EE

    "interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised

    Also refer to the following judgements
    Pentagram Properties Private Limited vs. DCIT [ITAT mum] (in this case processing fees was of 55 Lacs)

    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 service charge or any other fees etc then the AO might not give you deduction for that.

    Read more at:
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