Hello, I have taken a housing loan partly from SBI bank and also some amount from my father (details of the transaction are recorded that time but on the white paper only) in year 2013. I have completed the repayment to SBI in year 2019 (which i was paying consistently since the time of loan allotment). I was also paying reasonable amount (as principle + interest) from last 2 years to my father which i realise as well in his income (interest Part) while filling the income tax. I will now be continuing to do the same in coming years until he is alive. My question here is, if this loan amount he gave to me is transferable to his legal successor after his demise (whatever is the leftover value at that time). He is quite unwell currently and his health is deteriorating fast. I wanted to understand that if my mother can get the possession of this loan amount as an asset and i can continue repaying to her and of course i will declare the interest income as a part of her income. What documents i need to keep to certify this transaction ? regards Mohit Jain
Yes you can repay such loan to her and she will show it as her income and it can just be done using a will in which it will be mentioned that she will receive all assets and liabilities of your father and you can again enter into an agreement with your mother mentioning the loan outstanding on that date and interest rate on such loan.
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Thank you
Hello,
Yes, the loan (advance) pending to your father can be transferred to your mother, this can be done through the will of your father. Afterwards, interest will form part of your mother's income.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Hi Mohit
Yes, you may pay the remaining amount to your mother. Prepare notarized documents for the same.
Please note that interest payments to your father or mother won't qualify as deduction of interest under the head house property.
Hello Naman, Hunny and Lakshita, Appreciate your response. Can you share me the pointer from the income tax rule itself or link to read and keep it for my future reference in case any query received from IT dep. @Lakshita, regarding your second statement, My understanding is if i have to enter into new agreement with my mother then i will continue repaying this loan amount (Principle + Interest) and declare the interest amount as part of her income plus continue claiming 2 lakh,or whatever will be the limit, exemption in my income. is this not allowed ? C did this partly for last 2 year while repaying to my father. Can you clarify this once?
Hi Mohit,
Yes, the loan amount can be transferred to your mother thorough will.
It is advisable that everything is properly documented.
Hi Mohit
This is a very subjective question of law. The law doesn't mandate the loan to be from a bank only. Several factors are involved in allowability of the interest expense. Most important being, the interest charged should be reasonable and a legal certificate of interest should be provided by the lender along with name, address and PAN. Further, proper loan agreement must be executed.
Also, you must have sufficient proof to substantiate that the loan from your parents was actually used for the purchase of property or construction.
No, it is not allowed.
You can not claim deduction on Interest payments to your father or mother under the head house property.
Yes you may get deduction under the head house property for loan from your parents but it's advisable to have proper documents for loan repaid and interest charged and it must form a part of their income.
You can go through section 24(b).
Yes, interest deduction will be available to you, proper documents should be maintained for the same.
- Interest to be paid to mother will be allowed as deduction subject to proper documentation.
