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I have purchased a flat which is currently under construction. I am planning to use my savings, some amount borrowed from my father and a home loan to pay the builder. What should I do to get home loan benefit on the money that I am planning to borrow from my father? I’ll be paying him the FD interest that he is currently getting on it. I may not be paying back every month, but as a lump-sum amount (money borrowed + interest) when some of my savings mature next year. Please advice me how I can go about claiming the interest paid back to my father when I am repaying it. Is a letter from him enough proof to claim the benefit?

Section 24, which deals with deduction of interest while computing income from house property, is not finicky about from whom borrowings have been made so much so that even interest paid to your father would make the grade. Yes a formal letter from him would suffice for this purpose. But the principal thereof would not make the grade for deduction under Section 80C because that section specifies the sources repayment to whom makes the grade.

S. MURLIDHARAN

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