Will a home loan taken from a friend/relative be eligible for tax-deduction?
Yes, you can claim deduction on the interest on the loan under Section 24, which is up to Rs 1.5 lakh a year. However, you cannot claim deduction on the principal amount under Section 80C, as that will be applicable only if you take a home loan from a recognised financial institution.
Which document will help the borrower claim deductions?
Interest payment to friends and relatives can be claimed under Section 24 but only against a certificate received from them. In the absence of the certificate, you would not be eligible for the deduction.
