Selling a home bought on loan within five years reverses tax benefits under Income Tax Act
- Selling a home within five years of purchase can reverse tax benefits claimed on the loan’s principal repayment.
- The reversed Section 80C benefits are added to the seller’s taxable income in the year the property is sold.
- Earlier tax benefits claimed on home-loan interest are not reversed when the property is sold within five years.
- The five-year period is counted from when possession was taken; waiting until it ends can avoid reversal of the principal-repayment benefits.
Source: outlookmoney.com
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