80C Housing Loan Principal & Interest deduction
I had taken a housing loan and was claiming deduction under 80C for the principal portion and for interest portion i claimed deduction under Income from House property. Due to some problem, i had to sell the property in the 4th year of my possession of the property. What are the consequences?
Will i lose the tax benefits of both principal and interest? Kindly explain
Deduction upto 1 Lakh is available under section 80C and interest portion is deductable under section 24b.
However as per 80C, the property should not be sold within 5 years of aquisition. In case the property is sold within 5 years from the date of aquisition, the deduction will be discontinued and entire deduction claimed in earlier years should be charged to income tax as income of the year in which property is sold.
however, deduction claimed under section 24b need not to be reversed and are allowed even if the property is sold within 5 years of aquisition.