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Mortgage loan agst assets purchased to satisfy section 54

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Querist : Anonymous

Querist : Anonymous (Querist)

01 August 2013
Dear Sir,

I have purchased a house from capital gain u/s 54 from the old house sold. Now bank is ready to provide me home loan refinance agst the same.
1.Whether I can take the loan.If yes is it violates the conditions of Section 54
2.Whether I can take principle and interest payment exemption u/s 24 and 80C.

Please clarify.

Thanks & Regards,

Murli

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

01 August 2013 "Now bank is ready to provide me home loan refinance agst the same."
.
Please replace the word "Refinance" with "Finance" and then "Finance" with "Mortgage Loan" . This is because, you are availing loan for the first time and that too for not financing the house. It may be for other purpose.
.
Q 1.
Whether I can take the loan.If yes is it violates the conditions of Section 54
.
" Mortgage" is not treated as "Transfer".
In my view, no breach of condition of Section 54 takes place. You may avail loan.
.
Q 2.
Principle and Interest payment exemption u/s 24 and 80C.
.
In respect of mortgage loan deduction U/s 24 as well as U/s 80C is not available.

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