Answer

1. F

   Facts

   Interest on money borrowed to buy, build or repair a house is deductible even if the lender is a relative or friend. You need a certificate from the lender showing interest, and the loan must be used for the house. The lender must report the interest as income.

2. P

   Provisions and law

   • Sec 24(b) (now Sec 22(1)(b))Deduction for interest on a home loan; ₹2,00,000 cap for self-occupied houses under the old regime
3. A

   Analysis

   Sec 24(b) (now Sec 22(1)(b)) is not limited to bank loans. If you paid your uncle ₹1,00,000 interest at a reasonable rate and the money went into the flat purchase, you can claim it, within the ₹2,00,000 limit for a self-occupied house under the old regime. Keep a written agreement, bank transfers and his certificate. He shows the ₹1,00,000 as income from other sources.

4. C

   Conclusion

   1. 1Make a written loan agreement with rate and terms.
   2. 2Route the loan and interest through banks.
   3. 3Get an interest certificate from your uncle each year.
   4. 4Claim interest in Schedule HP.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.