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capital gains need to be invested or loan can be taken

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srujan (Querist)
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18 July 2011 when claiming exemption u/s.54F is it necessary to invest the capital gains in new house. is it sufficient if new house is bought from loan funds.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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18 July 2011 It is sufficient in case the new house is bought from loan funds. The required condition is purchase of the house. Section is silent about the source from where you invest. Further For section 54F , sales consideration of the original is required to be invested for getting full exemption.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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18 July 2011 Here I want to add that in Milan Sharad Ruparel V ACIT the mumbai tribunal has held a different view. According to the tribunal , Section 54F is not available where borrowed funds have been utilised.
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However, there are several judgements which affirm my earlier view.
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But, This is a recent judgement and should be considered seriously.

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