Non taxation of long term capital gain

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 November 2011 Mr. A & his father purchased a flat "PQR" in F.Y. 2002-03 that he is going to sale in F.Y.2010-11 . his father died in F.y. 2010-11 nobody is staying in that house since 4 years.

In F.Y.2007-08 Mr.A & Mrs. A took loan for 20 years for purchasing flat "xyz" where all are staying in house xyz from 4 years.

Can capital gain (arosed by sale of flat "PQR")sill be used for paying off the loan of flat "xyz"?
or
capital gain will be taxable in hands of Mr.A?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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28 November 2011 It depends upon the fact that in whose name , share of Mr. A's father has been transferred. If presently whole of the "PQR" belongs to A , he only will be liable for capital gains.
There is no exemption from capital gains tax in case the sale proceeds are utilised in repaying the loan taken for house XYZ.

However, A may purchase another residential house "uvw" to get capital gain exemption.

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