Interest Not Deductible from Income from House Property under Income Tax Act 1961: Section 25

By | July 13, 2014

Interest paid on loan take for house property is disallowed if the following conditions are not fulfilled as per section 25 of the Income Tax Act.  Any interest chargeable under this Act, which is payable outside India and on which

  1. Tax on such payment has not been deducted
  2. Tax on such payment  has not been paid
  3. There is no person in India who may be treated as the agent of the recipient for such purpose

Then such interest shall not be deducted in computing the income chargeable under the head “Income from House Property”.

Amounts/ Interest not deductible from income from house property.

  1.  Notwithstanding anything contained in section 24, any interest chargeable under this Act which is payable outside India (not being interest on a loan issued for public subscription before the 1st day of April, 1938), on which tax has not been paid or deducted under Chapter XVII-B and in respect of which there is no person in India who may be treated as an agent under section 163 shall not be deducted in computing the income chargeable under the head “Income from house property”.

Reference: – As Per Section 25 of the Income Tax Act 1961

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