top up on home loan and rebate in income tax

Hello All Tax Experts,

Can you share your view on claiming the tax exemption on the interest component of a topup-loan (taken along with home loan) in purpose of income tax filing for an individual. My loan is in ICICI and they say, it can not be claimed. Whats your knowledge on this.

Thanks,
Hemant more

Helpful Business Accounting and Taxation Jan 07

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Jay Scherrer (Tax and Accounting proffessional)

Hemant, Instead of relying on the decisions of the lending institution, do you have access to the legal statutes? Here in the USA, I find that the bank officers are mostly interested with commissions with supplying the loans. However, if you can substantiate your exemption with your country's tax law, you will be further ahead. Can you direct me to a link documenting your country's tax law? Here in the US, we typically view any form of financing building improvements as a business expense as it pertains to real investment. The major differences would be between a depreciative expense and a repair expense. The former depreciates the expense over a period of time, while the repair expense would be written off immediately. Jay Scherrer more

Feb 22

Hemant Mongia

Hello Mukesh Ji ... When I applied for top-up loan with the bank I submitted the photographs of the on-going interior work as asked by the bank ... But now I asked for the interest certificate; they say this category is not claiming tax exemption :( What worries me is the practices of lies followed by banks of such reputation. more

Feb 04

Mukesh Chaskar

usually the banks aloow the top up in the category of home equity loan. If The loan if sanctioned for major repairs which increases the value or earning capicity of the property it can be claimed.The bank should give you the interest payment certificate for home loan not for home equity. more

Feb 02

Hemant Mongia

Thank you Sastry Ji for your quick response! more

Jan 07

Sastryassociates Chartered Accountants (Fca Ratnakara Sastry)

Dear Mr. Hemanth, if you can prove that the top up loan has been taken for the purpose of home improvement, then you can certainly claim the interest on top up as well, section 24 does not discriminates between home and home improvment. Good Day D.R.SASTRY,FCA drsaca1@gmail.com more

Jan 07