Deduction u/s 24 of I. T. Act, 1961, Income Tax

[Vartik Choksi]

I have taken the loan from the bank to purchase the house. I am regular in making the payment of interest and principle to the bank. I also claim interest deduction u/s 24 of I. T. Act, 1961. Now if I borrow loan from wife and make the repayment of loan to the bank, whether I would be eligible to claim interest payable to my wife u/s 24 of I. T. Act, 1961?

Posts / Replies

[CA GOPALJI AGRAWAL]

Yes as per circular dated 20/8/1969 no. 28, once can claim the deduction of interest even on the loan taken to repay the original loan amount.