Part of amount only used to purchase new house from capital gain amount

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Mr X sold a property, realising a £26 lakh capital gain. He plans to buy a new home for £60 lakh, using £12 lakh from his capital gain and a £48 lakh mortgage. The advice given is that he can claim the full £26 lakh capital gain as a deduction under Section 54, as the total investment in the new property (£60 lakh) exceeds the capital gain amount. The source of funds, including the bank loan, is not relevant to the deduction eligibility.

YELLANKI RATHNAGIRI

YELLANKI RATHNAGIRI (Querist)
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15 December 2022 Mr X sold his house for 40 lakhs
after indexation (long term) he got 26 lakhs as capital gain
he wants to invest in new house
New house value 60 lakhs
bank agreed to give loan 48 lakhs and he will use 12 lakhs from capital gain amount

is he now eligible for Section 54 deduction in capital gain because he is using 12 lakhs only out of his gain 26 lakhs???

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 December 2022 He can claim full amount of capital gain as deduction u/s. 54 of the act, as he has invested 60 lakhs in purchase of new house property. It doesn't matter he utilized bank loan for that.

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YELLANKI RATHNAGIRI

YELLANKI RATHNAGIRI (Querist)
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15 December 2022 Thank You Sir for your valuable reply

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 December 2022 MOST WELCOME ..

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