THE GOVERNMENT offers generous tax benefits to those who buy houses on loans. But if the buyer turns into a seller too early, some of these benefits are rolled back. If you sell the house within five years, the tax benefits availed of under Sec 80C for the principal repayment will get reversed. This could mean a heavy tax liability if you have claimed deduction for the principal repayment of the home loan under Sec 80C. You won't be able to keep this under wraps because the buyer may seek tax benefits on the same property. However, the deduction for the interest on the home loan under Sec 24 will not be rolled back.

Similarly, if you have ended a life insurance policy within three years of purchase, any tax deduction availed on the policy will be reversed. Not many taxpayers are aware of this rule about insurance policies. No taxpayer is so honest as to report this in his ITR and pay additional tax for the previous years

Wait for at least five years before selling a house or three years before ending a life insurance policy.