Sec 54 exemption for more than 2 houses ???

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Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2013 My friend has sold 1 residential house last month and has got 10 lakhs from it..

now he wants to buy 1 flat for 20 lakhs separately by taking housing loan from bank
and
the proceeds from sale i.e,10 lakhs he wants to buy 5 cents land with old tiled house in it...

Ma point is..
1.I will claim deduction u/54 of 10 lakhs for 5 cents land... can i avail the same???
2. and i want to take the benefit of housing loan interest for the flat loan??/
is it possible...

and if both possible 1 & 2...
please guide me through the exemption limits of housing loan interest and principal portion of it....

please answer ma doubts...

CA Pallav Singhania

CA Pallav Singhania (Expert)
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13 October 2013 Section 54 is available in respected of purchase of residential property only...

The interest component of home loans is allowed as deduction under Section 24 B for up to Rs1.5 lakh in case of a self-occupied house.

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Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2013 Yes it has a house in it too...

CA Pallav Singhania

CA Pallav Singhania (Expert)
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13 October 2013 A new section has been introduced in the income tax act i.e. Section 80 EE. This section has been introduced to cater to the need for affordable housing. This section allows for a deduction up to Rs. 100000/- for the AY 2014-15 (i.e. FY 2013-14) to individual assesses for interest payable on their housing loan. Few conditions are required to be satisfied for this section to be applicable.

1)The loan is sanctioned between the FY 1/4/2013-31/3/2014.

2)The loan sanctioned does not exceed Rs. 25 Lakh.

3)The value of residential house does not exceed Rs. 40 Lakhs.

4)The assessee does not own any other residential house as on the date of sanction of the loan. In other words, this house is supposed to be his self occupied property.

5)The assessee is a first time home buyer

CA Pallav Singhania

CA Pallav Singhania (Expert)
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13 October 2013 Long term capital gain on sale of Residential property can be claimed exemption U/S 54 only when a residential property purchased within 2 years or constructed before 1 year or after 3 years from the date of sale such property...