Bought a house and selling before 5 years

1. When you sale house within 5 years from the end of financial year of purchase, any deduction claimed under Section 80C in respect to principal repayment of housing loan, would get reversed and added to your annual taxable income in the year in which the property is sold and not the interest benefit you claimed u/s. 24(b).

If you have not claimed any principal repayment of home loan u/s. 80 C, no question of reversal of any tax benefit. So, check that part first and take call.

2. You can claim tax benefits of home loan repayment for both houses, as at least one would let out.

3. A better solution would be, purchase new house (bigger one as planned earlier), may be on home loan; after April 2017, and plan to sell/ give posession of your old flat after March 31, 2018, but within one year from the purchase of new flat, the benefit of 80C claimed in old flat will not be reversed, at the same time exemption u/s. 54 would be available over LT cap gain.

Thank you, I believe I will have to shell out Rs.45k if I sell the house now.

Thanks for Dhirajlal Rambhia for reply, I bought this flat in Feb 2013, I was charged interest alone in Mar 2013,

So

Financial Year 1 - 2012-13,

Financial Year 2 - 2013-14,

Financial Year 3 - 2014-15,

Financial Year 4 - 2015-16,

Financial Year 5 - 2016-17 

As Dhirajlal Rambhia said "When you sale house within 5 years from the end of financial year of purchase", So, If I sell this flat in Apr 2017, technically, I need not repay 80C deductions, am I right?
 

No. For Feb 2013 purchase, (.........5 years from the end of financial year of purchase, ...),  to retain the 80C claims during these period, you will have to wait till March 2018.  So read care fully, I have mentioned to give possession not before March 2018.

"3. A better solution would be, purchase new house (bigger one as planned earlier), may be on home loan; after April 2017, and plan to sell/ give posession of your old flat after March 31, 2018, but within one year from the purchase of new flat, the benefit of 80C claimed in old flat will not be reversed, at the same time exemption u/s. 54 would be available over LT cap gain."

But I had suggested you a way to fulfill your wish to purchase new flat in near future, without loosing 80C claim and even getting exemption u/s. 54.