Pre closure of Home Loan & tax effect

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saida (Querist)

13 December 2009 Hi.. All
I have a small doubt regarding the pre closure of home loan. If, i had taken a loan say 20lakhs and purchased a house property.In yr 1 & 2 interest of 1.5 lakhs and principal of 1 lakh claimed in each year IT returns. If i close the home loan (pre closure) now, i mean 3rd year what is the tax effect?? for the interest already claimed?? and principal repayment?? pls specify the relevent section.. thanks in advance.. regards

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)

13 December 2009 No effect on the past claims. Whatever you have claim was right and it shall be reversed. Even you can claim the interest for this year also, if it is in the limits of Rs.1.5 lacs and principle repayment is in one lac rupees.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)

14 December 2009 Pre Close your Loan it effect to your next f.y not last which you have taken benefit of it..so dont worry and in that pre closer yr you can also claim both deduction as per limit even if you have pre closer the loan.

saida

saida (Querist)

14 December 2009 Thank u sir..
My question is whether the interest and principal amts (which were claimed in previous years) to be added back to the current year income, if loan is pre closed?? pls confirm...
Hope holding period is 5 years for the house property.. Holding period is applicable for only for the transfer / sale of house property or even it applies to preclosure of loan?? pls clarify... regards

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)

14 December 2009 No. Not at all to be added in current years income.

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