Exemption in Capital Gains
This query is : Resolved
12 September 2016
In order to save Tax on LTCG, one can invest in Residential Property. My question here is :
Suppose a person is willing to buy house worth 55 Lacs. He has arranged 45 Lacs of Rupees and will be arranging 10 Lacs as loan from Bank.
Now suppose he received 10 Lacs from sale of some other property which was inherited to him from his father after death. And subsequently he prepaid the loan amount of 10 Lakhs in one shot.
Can he claim Exemption under Capital Gains in this case? I agree he has not invested the sale consideration directly but used it to prepay the loan he took for investing in house.
12 September 2016
Repayment of loan will be considered as investment in property. If the time gap is less than one year then exemption under capital gain can be claimed.
Message likes :
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13 September 2016
Thank You Sir..!!
14 October 2016
Hello sir, would require your advise on one more question. What If the person is a joint owner with 4 of his brothers in the above inherited property which is sold
14 October 2016
Can he still avail the benefit of section 54?
16 October 2016
Yes he can avail the benefit.
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