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Girish   09 July 2023

Huf loan emi

If there is a HUF and HUF takes a home loan or car loan, will the EMI paid towards the assets be deducted from its profits?

If yes so then, 80C can be claimed for principle and interest along with this?


 6 Replies

P. Venu (Advocate)     09 July 2023

The posting is short of  material facts. Please post the complete facts.

Girish   09 July 2023

Can HUF deduct interest on home loan EMI as an expense?

T. Kalaiselvan, Advocate (Advocate)     09 July 2023

HUF can own a residential house without having to pay tax. In addition, it can also avail of a Home Loan to purchase a residential property and get tax benefits up to Rs 1.5 lakh under Section 80C of the Income Tax Act for loan repayment and up to Rs 2 lakh for interest thereon.

The income tax slab for HUF is same as that of an individual, with an exemption limit of Rs 2.5 lakh and qualifies for all the tax benefits under Section 80C, 80D, 80G and so on. It also enjoys exemptions under Section 54 and 54F with respect to capital gains.

you are not eligible for any deductions on your Car Loan if you are buying for your personal use. However, if you are buying a car for commercial use, you can show the interest paid in a year as an expense and reduce your taxable income.

Girish   09 July 2023

Thank you sir for your reply, 

I'm not so why I was not able to edit my answer before, despite making so many attempts
So in the same way, If I buy property for HUF business purposes, I can show the interest paid in a year as an expense right? Along with 1.5 lacs under Section 80C correct?

Perhaps 2 lacs will not be eligible as I am already taking the interest as an expense or can I take it separately??

T. Kalaiselvan, Advocate (Advocate)     10 July 2023

The interest paid towards the loan amount would be exempted from tax. 

If you have paid the interest then  you canshow it as expenses,  and claim tax exemptions accordingly 

Dr. J C Vashista (Advocate )     10 July 2023

Limit of exemption of tax is revised in almost all Finance Bill(s), check with your CA for the FY where you are concerned.  

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