Comments
I am claiming deductions under Section 80C for a home loan on my self-occupied property. What will happen if I sell my property within five years?
Will I have to forego the amount claimed as deduction?
Prateek
As per the provisions of the Income Tax Act, 1961, an individual may claim the deduction for any repayment of the principal amount of housing loan under Section 80C up to a maximum threshold limit of ₹1.50 lakh (applicable for FY 2016-17).
However, where the property, in respect of which deduction has been claimed, is sold/transferred before expiry of five years from the end of the financial year in which possession of such property was obtained, then the aggregate deduction claimed for previous years, if any, claimed under Section 80C by the individual shall be deemed to be the income of the financial year in which such property is sold.
Thus, in case you sell your self-occupied property within five years from the end of the financial year in which the possession of property was obtained by you, then the aggregate deduction under Section 80C which you have claimed so far shall be the taxable income in your hands in the financial year in which such property is sold.
My wife and I hold separate PPF accounts. I have some surplus funds. Can I invest this in our PPF accounts as ₹1.5 lakh in each account. Deposit by my wife in PPF is only for investment purpose and she will not claim tax deduction.
Prajiv Manerkar
Individuals who are residents of India are eligible to open their account under the Public Provident Fund (PPF). I understand that you and your wife already have PPF accounts and you wish to contribute your surplus funds in both the accounts.
With regard to the same, please be advised that Income Tax Act, 1961 does not provide for any prohibition on contribution towards the PPF account. However, as per the PPF scheme, an individual may contribute up to ₹1.5 lakh per financial year in a PPF account.
Thus, you may contribute up to ₹1.50 lakh in each of the PPF accounts. However, the maximum deduction that may be claimed by you under Section 80C of the Act shall be limited ₹1.50 lakh (as applicable for FY2016-17).
The writer is a practising chartered accountant. Send your queries to taxtalk@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.