if one sells house within 3 years of purchase, what will be the effect on deduction of 80c deduction for principal amout paid of housing loan, claimed in earlier two years in income tax returns? can it be reversed & demand notice may be issued by ITdepartment or not? or there will be no effect on it as it claimed in earlier years?
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Query on earlier calimed 80c deduction in stcg
Replies (3)
Hi
If the property is transferred before expiry of five years from the year in which possession was taken, aggregate amount of deductions of income so allowed in the earlier years shall be added to the total income of the assessee of such previous year and shall be liable to tax accordingly.
yes, the 80c which u claimed in preceeding years will be clubbed to ur income in the year which u sold,(if sold with in 5yrs)
If the assesse 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 then the deduction allowed in respect of the preceding years shall be deemed to be the income of the assessee in the year of transfer and shall be liable to tax in such year.
Therefore, the deductions claimed in preceding two years will be subject to tax in the year of transfer of property.
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