Repercussion of sec-80c and sec24(a)

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 June 2016 Hi Team,

A House Property purchased on Home Loan in Jun-2013 and Income tax benefit arising out of Principal and interest payment is claimed under Section 80C and Section 24(a) in AY2014-15. Now, after 1 year i.e. Jun-2015, the H/P is sold. I would like to check what would be the treatment of the following:

(i) Section 80C deduction claimed in A.Y. 2014-15? Will it be reversed in AY 2015-16 or re-computation of Income of AY 2014-15 needs to be done?

(ii) Similarily for Interest claimed under Section - 24 (a).

Shishir Nayak

Shishir Nayak (Expert)

29 June 2016 Section 80C(5) stipulates that in case an assessee transfers the house property before the expiry of five years from the end of the financial year in which possession of such property is obtained by him/her, then no deduction shall be allowed and the aggregate amount of deductions of income already allowed in respect of the previous year or years shall be deemed to be the income of the assessee in the year of sale and taxed accordingly

Rupesh Jain

Rupesh Jain (Expert)

29 June 2016 its reverse the benefit of all the years in sold year, and recompute your tax liability for the year in which you take the benefit for house loan principle. and intt. also will include in you income if property sold within 5 year from completion of property.

Querist : Anonymous

Querist : Anonymous (Querist)

29 June 2016 @Shishir Nayak- Thanks. What would be the treatment for interest?

@Rupesh Jain- Its very unlikely that re-computation needs to be done, however if you have any Section or case law supporting your viewpoint then please share.

Querist : Anonymous

Querist : Anonymous (Querist)