Home Loan Int Accrual

Hi Mr Subramanian,

Of course, the interest on capital borrowed for purchase of flatwould be allowed to be set off against other income (in case theflat isn't let out). Section 24 quite explicitly states this, unlikeSection 80C, which insists on the actual payment of instalment asalso that the loan should be obtained from certain specifiedentities, before the instalment becomes eligible to be knocked offout of your income.The allowance of interest u/s 24, even if it's not actually turnedover to the lender was also established after the Allahabad HighCourt ruling in the case of CIT vs Devendra Brothers & Co (200 ITR146). The court held that interest on housing loan whether paid ornot would be a permissible deduction in terms of section 24 of theAct.As to how long can you go on like this, I guess as long as the HUFkeeps showing the interest as its interest income year to year,there is no limitation as such, by which the liability has got to beliquidated. But it would be advisable to actually clear the amount,particularly in view of the fact that the loan is from a closeassociate of the assessee.Thanks,CA Sanjeev Bedi--- In http://finance.groups.yahoo.com/group/ICAI_CIRC_MEERUT_CA/post?postID=ucdS0_gfig3masNtSyn9heCYvmT8kYRctNitxo67IWss9E8DFxO83JwRWk76b60bR2HH-_nUl0y1I-SJPiEjPKpOBIf9pjGELU-vlz8, "Subramanian B" wrote:>> Hello>> A person X has borrowed from his own HUF account towards purchaseof flat.> He is paying interest on the borrowal . However the interest paidis being> accured in the books of X & that of HUF's and not actually paid .Is it> allowable as deduction u.s 24. If yes, how long can we go on withthis> arrangment ?>> Regards>> Subramanian>