I will like to share with you all a recent
relief which we all got recently from our beloved IT department.
A ruling by the Mumbai bench of the income tax appellate tribunal spells welcome relief for tax payers who have paid huge sum as prepayment or foreclosure charges on early repayment of their housing loans.
Such taxpayers can claim prepayment charges as deductible under the head of income House property and could set it off against other heads of income. This will help in saving tax.
Hearing an appeal filled by Windermere Properties, the tribunal examined the definition of interest. Interest on housing loan is admissible as a deduction under income from house property. The bench compromising R.K.Gupta and R.S.Sayal observed, “The appellant had obtained a loan from HDFC for acquisition of property. The bank accepted the early repayment of loan on receipt of prepayment charges (of rs.1.56 crore) .It is obvious that these prepayment charges have a live and direct link with the housing …
A ruling by the Mumbai bench of the income tax appellate tribunal spells welcome relief for tax payers who have paid huge sum as prepayment or foreclosure charges on early repayment of their housing loans.
Such taxpayers can claim prepayment charges as deductible under the head of income House property and could set it off against other heads of income. This will help in saving tax.
Hearing an appeal filled by Windermere Properties, the tribunal examined the definition of interest. Interest on housing loan is admissible as a deduction under income from house property. The bench compromising R.K.Gupta and R.S.Sayal observed, “The appellant had obtained a loan from HDFC for acquisition of property. The bank accepted the early repayment of loan on receipt of prepayment charges (of rs.1.56 crore) .It is obvious that these prepayment charges have a live and direct link with the housing …