Want to sell house which is under housing loan


Hi, I am 30yrs salaried, I had purchased a house through IDBI bank loan in 2010 but I dont like this house and want to sell it and move on to a new one. And I am availing tax benefits on this loan from 2010 onward. So I request someone to answer my following queries.

  1. What can I do with my housing loan now? One option I have in my mind is to transfer the loan to the purchaser, Is there any better option?

  2. I read somewhere that after availing tax benefit I can sell it only after five years from the date of purchase. In that case how can I make my way? Shall I have pay all the tax benefit now?

Please spare your time knowledge and time to answer this. Thanks in advance


if you sell the house before 3 years you will be under short term capital gain tax bracket. whatever profit will be there will add to your income & based on that you’ll have to pay tax. If you sell after 3 years it will be under long term capital gain bracket. In this case either you pay long term capital gain tax or re-invest the money to other property to evade tax.


Hi Nasiruddin,

In order to understand the process, we will take an example. Suppose, you sell a house worth Rs. 60 lakh. You have a Rs. 10 lakh loan running on it. In this case, you approach your bank to initiate the process of closing the loan. Here they are three different ways you can sell the house.

One is where the buyer has his own funds, another is when the buyer is getting a loan from the same institution where you took the loan or the buyer gets a loan from another institution.

If the buyer is using his own funds, there are no issues. You can use the money to close the loan of Rs. 10 lakh and you can ask the bank to transfer the property in the buyer’s name after you receive the remaining amount from the buyer. In case the buyer is taking a loan from the same institution, the down-payment for the loan can be used to close the previous loan and then, the bank will transfer the property to the buyer’s name.

When the buyer takes a loan from another institution, things get a bit complicated. First, the buyer needs to make the down-payment for the loan. Then, if that is not enough, they might need to use the loan amount to close your loan. Once the lender pays the total amount of the property to you, then the papers will get transferred to the buyer’s name. Usually, in the first and second case, original property papers are released within a fortnight. However, in the second case, there might be a delay in getting the property transferred.

If you sell the house within 5 years of purchase, the tax benefits might get reversed once you sell the house.

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BB Expert