<div><strong>Subhash Lakhotia</strong></div><div> </div><div>In the recent past, salaried employees have shown keen interest in taking advantage of the tax provisions by making investment in the residential house property. It is a very well known fact that if salaried employees like other tax payers were to construct a residential house property or were to buy a residential house property by taking loan, then he would enjoy a special deduction in respect of interest on loan to the maximum extent of Rs 2,00,000 per annum. Now comes the next very important question and i.e. how to claim deduction from the employer itself in respect of the interest which is paid or which is payable in respect of self-occupied residential property. Well, under the provisions of the Income-tax Act, 1961, it is possible for the employer to grant deduction to the employee in respect of the loss by way of interest in respect of the property so purchased by the employee. The biggest advantage of this deduction is that the Interest so payable in respect of the housing loan is deducted by the employer from the salary income of the employee. Thus, without going to the tax department the employee is able enjoy tax concession or tax benefit In respect of interest payment on the housing loan direct from the hands of the employer.</div><div> </div><div>Well to enjoy this big bonus benefit of gaining the deduction right from the employer in respect of interest on the housing loan there are certain obligations which are cast on the employee. The employee should very carefully understand these obligations and comply with the formalities as are required by the law and thereafter submit necessary papers and details concerning the interest on loan to the employer. It may please be noted that if these formalities are not complied with and if the details pertaining to the interest on housing loan etc. is not provided to the employer In that event the employer will not be under any obligation to grant deduction in respect of the interest on the housing loan for self-occupied property. It is also worthwhile to note that if due to non-submission of the papers from the end of the employee if the employer does not grant deduction in respect of the interest on the housing loan to the employee than the employer will be deducting the income-tax on the gross total salary income without giving any benefit or deduction or rebate in respect of the interest on the housing loan. If the employer does not grant necessary deduction in respect of the housing loan due to non-submission of the papers or details etc. by the employee to the employer, in that event, the employee will have no option except to proceed for claiming the deduction by filing the Income-tax Return. Although it is possible to claim the deduction even at the time of filing the return but that would be not a good investment decision because the tax had already been deducted at source on the salary income by the employer without the deduction being granted in respect of the housing loan interest</div><div>.</div><div>Now, let us see very briefly as to how to go about so as to claim a deduction right from the employer in respect of interest on the housing loan on account of capital borrowed tor residential property. To claim this deduction of interest in the first phase please do remember that you take loan for housing after 1“ April, 1999, and this loan can be from any person or organization and that the loan should be for constructing or acquiring the residential house and the construction or acquisition of such residential unit out of such loan amount has to be completed within three years from the end of the financial year in which the capital is borrowed. Further please do remember that the most important point to claim the deduction in respect of the interest on housing loan upto Rs 2,00,000 would be that the employee has to furnish before the DDO a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of principal and interest of the loan so repaid.</div><div> </div><div><em>The author, Subhash Lakhotia, is Tax and Investment Consultant at New Delhi for the last over 45 years. </em></div><div><em>E Mail:lakhotia49@gmail.com </em></div><div> </div>
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