Tax Deduction on Principal Repayment Section 80C

by veeru Last Modified: January 8, 2018

Tax Deduction on Principal Repayment Section 80C

The deduction to claim principal repayment is available for up to Rs. 1,50,000 within the overall limit of Section 80C in FY 2014-15 (Rs. 1,00,000 if you are filing returns for last financial year). Check the principal repayment amount with your lender or look at your loan installment details.

Conditions to claim this deduction

To qualify for this deduction:

The home loan must be for purchase or construction of a new house property.
The property must not be sold in five years from the time you took possession. Doing so will add back the deduction to your income again in the year you sell.

Stamp duty and registration charges

Stamp duty and registration charges and other expenses related directly to the transfer are also allowed as a deduction under Section 80C, subject to a maximum deduction amount of Rs.1,50,000. Claim these expenses in the same year you make the payment on them.

The buyer has to deduct TDS at 1% of the total sale consideration if the amount exceeds Rs.50 lakhs. If payments are being made in installments, TDS must be deducted on each installment.