Car loan interest

YATIN (Querist) 24 April 2013 This query is : Resolved
Sir
I am filing income tax returns regularly. My source of income is nominal rent income, bank interest income, bond interest income, equity stock capital gain income. There is no business income. I had taken car loan from State Bank of India for car purchased in my name. In EMI statement from bank there is clear bifurcation of loan repayment and interest element. Car is for my personal use.

1) Can I claim interest paid to bank as deduction from my income from other sources viz. interest income from securities? In my opinion interest paid to bank is interest on loan taken which can be claimed as expense against interest income from securities.

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Rajendra K Goyal (Expert) 24 April 2013
No, under the information provided the interest on the car loan is not exempted. Exemption can be for car used for business purposes subject to conditions.