The Central Board of Direct Taxes (CBDT) circular number 28 (dated August 20, 1969), allows people to claim a tax deduction under the old tax regime if they take out a fresh loan to repay their home loan.
For example: if you have taken a home loan for 15 years at 7.5% interest rate (assuming) and your brother is giving you a loan at 1% interest rate for say a 8-year term, then you can use the brother's loan amount to repay a higher portion of the home loan and still claim a tax deduction for the interest of both the loans, up to Rs 2 lakh under the old tax regime.
