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Pre payment of housing loan eligible for deduction u/s 80c?

CA Shyam Sunder Agarwal (CA) (103 Points)

14 March 2012

Dear friends,

Please advise whether pre-paymnet of housing loan eligible for deduction u/s 80C (principal amount) ??

Regards,

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6 Replies

Sonam Bidasaria (CA) (770 Points)
Replied 14 March 2012

Pre-payment of housing amount is not eligible for deduction under Sec 80C as the Sec 80C(c)(xviii) reads as under :

".............any instalment or part payment of the amount due....................."

In case of pre-payment, the amount, you are paying, is not due for payment and hence does not meet the criteria for dedcution under Sec 80C

Shewta (Accountant) (117 Points)
Replied 14 March 2012

Income Tax Department Blog To Answer Tax Queries

Important link:

https://www.labnol.org/india/law/income-tax-department-blog-to-answer-tax-queries/325/

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 14 March 2012

I think that the repayment of the loan would be eligible for deduction u/s 80C, as the section 80C states any amount whihc is due to a finance co, whihc means that the assessee is liable to the finance co to square up the loan.

CA SACHIN VIJ (Chartered Accountant) (112 Points)
Replied 15 March 2012

As per section 80c:

80C (xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head "Income from house property" (or which would, if it had not been used for the assessee's own residence, have been chargeable to tax under that head), where such payments are made towards or by way of-

a)....

b)....

c) repayment of the amount borrowed by the assessee