Fresh loan raised to repay original loan taken for constructing/ buying property - Whether interest payable on second loan would also be admissible as a deduction under clause (vi) of sub-section (1)
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Interest deductibility on replacement loans: interest on a replacement loan is allowable if used solely to repay the original loan. If a subsequent borrowing is in fact used solely to discharge the original loan that financed the property, and this use is proved to the satisfaction of ... Summary
Interest deductibility on replacement loans: interest on a replacement loan is allowable if used solely to repay the original loan.
If a subsequent borrowing is in fact used solely to discharge the original loan that financed the property, and this use is proved to the satisfaction of the assessing officer, the interest paid on the subsequent borrowing is treated as interest on borrowed capital for the property and is allowable as a deduction.
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