you take a home loan to buy a house, you are entitled to exemption on the re-payment of the principal under Section 80C. Your Home Loan EMI consists of Principal and Interest component. The principal component is allowed as deduction under Section 80C. If you sell your residential house within five years, you may have to forgo your tax benefits. if you sell the house within five years of buying it, you will lose this exemption in the year you sell the house. For that year, the principal amount gets added to your income and you will be taxed according to your income slab. The entire amount of deduction claimed under Section 80C in prior years on the amount of the principal repayment will be added to the taxable income in the year of sale of the property. Also, no income tax deductions shall be allowed in respect of repayments made during the year of sale of the property. However, the exemption for interest paid, under Section 24 (b), will not be withdrawn. This rollback is applicable only to deduction(s) claimed under Section 80C. Deductions claimed under Section 24 (b) on interest payable on your home loan will not be withdrawn.