gsharma
1
Dear Pankaj,
Please suggest Is there any Tax benifit I would get If I prepay all or partial amount of my home loan by borrowin money from my Parents provided bank allows to do that?
If I borrow money and then prepay my home loanthen what are the Income tax libilities I and my parents will have to bear. My father is now a retired and senior citizen.
Best Regards Gaurav
There is no tax benefit for prepaying the home loan amount.
Your parents can gift you any amount of money without any tax liability for both.
If you take money as loan and pay interest to them, you can claim income tax deduction for same too.
What If i pay back the money on monthly basis but without interest. Do I need to go through any legal paperwork to borrow money from them or take it from them as a gift.
Please suggest Best Regards Gaurav
You can pay back money without interest too, but in that case there won't be any income tax benefit.
If you are getting amount as gift, there is no need to pay it back.
But if you are treating it as a loan, you can make a simple agreement on paper stating the amount of loan, payment terms and duration, signed by both parties and two witnesses.
