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capital gain on residential accomodation

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Querist : Anonymous

Querist : Anonymous (Querist)

12 July 2011 The LTCG is Rs 90 lakhs and cost of new house is 55 lakhs, Rs.35 lakhs are invested in NTPC Bonds. However purchase of new house is part financed by taking a home loan of Rs 25 lakhs.
Is full amount of LTCG exempt or it gets reduced by amount of home loan on the argument that only balance (55-25= 30 lakhs) is utilised out of LTCG towards buying the new house?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 July 2011 It is not necessary that you have to invest the amount out of sales consideration only.
The condition is just to purchase a house property.

The exemption will be allowed even if loan is taken. The source of investment is not important, only investment is important.

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