Income tax rules on pre-EMI repayment on home loan if property sold before 5 years


Question: I took out a mortgage for an apartment and paid pre-EMI as well as EMI. I have been requesting the pre-EMI repayment for 3 years (total pre-EMI interest spread evenly over 5 years) as well as a deduction under section 24 (b) and 80C in respect of paid IMEs. Now I have sold the apartment in the current year and have paid off the entire loan amount. I would like to know if I can apply for the pre-EMI reimbursement for the next two years remaining after the apartment has been sold?

Answer: Since you have already sold the house you were entitled to claim interest on prior to EMI for the next two years, since no income is taxable from the same property of the house under the Title Home Ownership Income, your right to claim the Pre EMI Proportionate Interest for the remaining period is forever lost and you cannot claim it even against any other property in the house. However, you will be able to claim proportional interest relating to the current year, as there is no provision to reduce the claim based on the time period the property is held during the year. so effectively, your right to claim pre EMI interest for one year is lost.

Since the home is sold within five years of the end of the fiscal year in which possession of the home was acquired, any discounts requested by you in the past three years for repayment of the loan principal real estate under section 80C will have to be reversed and added to current year income.

In addition, no deduction under section 80C is available during the current year for the principal of the mortgage loan repaid during the year.

Please note that there is no similar provision for the reversal of interest claimed under Section 24 (b) in the past in the event that the house is sold within five years of taking possession. . In addition, you would be entitled to claim the deduction for interest paid during the year, including pre-EMI interest under Section 24 (b).

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