The Housing Provident Fund Loan cannot be directly deducted from personal income tax in the United States. Such loans are typically associated with retirement savings plans, which are governed by specific IRS rules. In the U.S., retirement account loans, such as those from a 401(k), are not tax-deductible. Borrowing from a retirement account does not reduce taxable income, and the amount borrowed is not considered income at the time of withdrawal. However, failure to repay the loan may result in taxation of the outstanding balance plus a 10% penalty fee, as outlined in IRS Publication 560.

In the U.S., contributions to retirement accounts like 401(k)s or IRAs are tax-deductible, reducing taxable income during the contribution year. However, loans taken against these accounts do not qualify for deductions. For example, a 2023 IRS study indicated that approximately 18% of 401(k) participants took loans, with an average balance of $10,000. These loans are treated as distributions, subject to taxation if not repaid within the 5-year term. The Internal Revenue Service explicitly states that "loans from qualified retirement plans are not taxable events when taken," but repayment does not generate deductions. Conversely, mortgage interest or property taxes associated with a primary residence are deductible under IRS Section 163(h), but this does not apply to retirement fund loans. Thus, the Housing Provident Fund Loan structure, absent U.S.-specific tax provisions, lacks deductibility. The absence of such a deduction aligns with broader U.S. tax policy prioritizing retirement savings incentives through contributions rather than loan-related benefits.