Housing loan repayment.

Dear Sir,

I am having Housing Loan Outstaning amount of Rs.6 Lakhs as on date, i have received my PF settlement amount around Rs.5 Lakhs, whether i can pay the full PF amount to my Housing loan outstanding or can i pay 50% and retain remaining loan for my IT exemption purpose.

If i pay full amount to Loan, then hence forth i have to pay Tax on my income.

Request your kind advise on this to overcome the hurdle.

Thanks in advance,

Raju.