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Treatment of Home Loan- If home sold during the year

CA. BIJENDER KR. BANSAL (ACA, B.COM) (8148 Points)

17 January 2009

Dear All,

An Employee has claimed till date Interest on home loan and repayment of Home loan. Now in December ,he sold this home. Now what treatment , we have to do.
Now he submitted Rent Slip on December onwards for HRA Exemption.

Please suggest what treatment we have to do.
CA. B.K.BANSAL

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4 Replies

Sathish Karunakaran (ACA) (614 Points)
Replied 17 January 2009

Interest on Home Loan - Can be claimed u/s.24 up to date of squaring off the home loan during the financial year.

HRA - can be claimed u/s.10(13A) for the period of rent paid during the year

Principal Component - If the sold property is transferred within 5 years from the end of the financial year when the property purchased, then so far claimed sums u/s.80C w.r.t principal repayment relevant to such prior periods [5 years] will be deemed as income chargeable during the current year and no additional deduction allowed for current year on account of principal repayment.

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R.Suresh (Sr. Executive) (394 Points)
Replied 17 January 2009

Yes, He have to submite the rent receipt from December onwards and one more thing if he don't have anohter own house in the same city, and he also going to close the home loan account in it self to be sale or to sold.

Ritesh Sharma (CA) (58 Points)
Replied 17 January 2009

Interest on Housing Loan and repayment of housing loan can be claimed respectively. If the home is sold before 5 years, then the principal repayment portion will get added to income.

Capital Gains on the sale of property,if any, wil have to be paid.

CA. BIJENDER KR. BANSAL (ACA, B.COM) (8148 Points)
Replied 17 January 2009

Dear All,

Thanks for reply.

My question is , if employee squarred up the account i.e preclosure of loan. then Interest & Principal amount to be deducted till date of squarred up account or total amount.

CA. B.K.BANSAL