Short term capital gain
This query is : Resolved
03 September 2011
SIR,
I PURCHASED A PROPERTY IN THE F.Y. 2007-08 AND SOLD IT IN THE F.Y. 2010-11 , IT'S PROFIT IS SHORT TERM OR LONG TERM , IF IT IS SHORT TERM , CAN I INVEST IT AGAIN IN A NEW PROPERTY.
I PURCHASED A PROPERTY IN THE F.Y. 2007-08 AND SOLD IT IN THE F.Y. 2010-11 , IT'S PROFIT IS SHORT TERM OR LONG TERM , IF IT IS SHORT TERM , CAN I INVEST IT AGAIN IN A NEW PROPERTY.
03 September 2011
If property is hold for more than three years the gain will be long term.
If gain is short term then you shall not be reinvest in new property
If gain is short term then you shall not be reinvest in new property
03 September 2011
calculation of three year how should I , calendar month or financial year
03 September 2011
from the date of purchase and till the date of sold
03 September 2011
in the case of borrowed loan from any bank and claimed every year deduction of 80c loan principle and also claim interest on housing loan , and sold the property after four year, in that case what will be there regarding deductions.
03 September 2011
if property is sold after four year, then deduction which u have claimed, shall not be added in the your income in the year in which such assets sold
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03 September 2011
What is the limit of interest on loan for house property for deduction and also principle of loan.
03 September 2011
rs. 1.5 lacs for interest and rs. 1.0 lacs for principal
03 September 2011
IF I HAVE MY OWN HOUSE BUT THAT IS ON RENT , IN THAT CASE CAN I CLAIM HOUSE RENT ALLOWANCE IF YES THEN HOW MUCH , SIR PLEASE CLEAR MORE.
03 September 2011
yes you can claim hose rent allowance. if you are consed-ring the rent income from self hose
03 September 2011
SIR, HOW MUCH I CAN CLAIM HOUSE RENT ALLOWANCE , WHAT IS THE LIMIT OR % FOR THAT.
25 July 2025
Here's a detailed explanation addressing the questions about **Short Term Capital Gain (STCG) on property sale**, **investment for exemption**, **loan deductions**, and **House Rent Allowance (HRA)**:
---
### 1. **Short Term or Long Term Capital Gain on Property Sale**
* **Holding Period for Property:**
* For immovable property (like land or building), the period of holding is calculated from the date of purchase to the date of sale.
* **If held for more than 36 months (3 years), the gain is Long Term Capital Gain (LTCG).**
* **If held for 36 months or less, the gain is Short Term Capital Gain (STCG).**
* **Calculation of 3 years:**
* The period is counted in **calendar months**, not financial years.
* For example, if property was purchased on 10th June 2007, then by 10th June 2010 it completes 3 years.
* Sale after 10th June 2010 will qualify for LTCG treatment.
---
### 2. **Reinvestment to Claim Exemption on Capital Gain**
* **Section 54** provides exemption on capital gains arising from sale of a residential property if reinvested in another residential property.
* **Applicability:**
* **For LTCG only:** If the gain is LTCG, you can claim exemption by reinvesting the gains in another residential property within specified time limits.
* **For STCG:** No exemption is allowed under section 54.
---
### 3. **Loan Deductions on Housing Loan**
* **Deductions under Section 80C and Section 24:**
* **Principal Repayment (Section 80C):**
* Maximum deduction allowed up to **₹1.5 lakh** per year.
* Only principal repayment amount qualifies.
* **Interest on Housing Loan (Section 24(b)):**
* Deduction up to **₹2 lakh** per year for self-occupied property.
* If the property is rented out, the entire interest paid can be claimed as a deduction (subject to loss from house property limit of ₹2 lakh per year).
* **If you have claimed deductions on principal and interest and then sell the property after 4 years:**
* There is **no need to add back these deductions to your income**.
* The deductions claimed in earlier years remain valid and do not affect capital gains computation.
---
### 4. **House Rent Allowance (HRA) Claim**
* **If you own a house but live in a rented house, can you claim HRA?**
* Yes, you can claim HRA exemption if you pay rent for your accommodation.
* **How much HRA exemption can be claimed?**
The least of the following three amounts is exempt from tax:
1. Actual HRA received.
2. Rent paid minus 10% of basic salary.
3. 50% of basic salary if living in metro city; 40% if in non-metro city.
* **Rent Received on Own House:**
* If you own a house but it is rented out, rent income must be declared as **income from house property**.
* You cannot claim HRA exemption for your own house if you don’t pay rent.
* If you pay rent for another house, HRA exemption can be claimed on that rent.
---
### Summary Table:
| Query | Answer |
| -------------------------------- | -------------------------------------------------------------------- |
| Holding period for LTCG/STCG | More than 36 months = LTCG; else STCG (calendar months) |
| Exemption on STCG | No exemption on STCG for reinvestment in property |
| Loan Principal deduction | Up to ₹1.5 lakh under Section 80C |
| Loan Interest deduction | Up to ₹2 lakh under Section 24(b) (self-occupied) |
| Impact of loan deduction on sale | No need to add back previously claimed deductions |
| HRA exemption | Least of actual HRA, rent paid minus 10% salary, 40/50% basic salary |
---
If you want, I can also help with **detailed capital gain calculation templates** or **HRA exemption calculation examples**. Would you like that?
---
### 1. **Short Term or Long Term Capital Gain on Property Sale**
* **Holding Period for Property:**
* For immovable property (like land or building), the period of holding is calculated from the date of purchase to the date of sale.
* **If held for more than 36 months (3 years), the gain is Long Term Capital Gain (LTCG).**
* **If held for 36 months or less, the gain is Short Term Capital Gain (STCG).**
* **Calculation of 3 years:**
* The period is counted in **calendar months**, not financial years.
* For example, if property was purchased on 10th June 2007, then by 10th June 2010 it completes 3 years.
* Sale after 10th June 2010 will qualify for LTCG treatment.
---
### 2. **Reinvestment to Claim Exemption on Capital Gain**
* **Section 54** provides exemption on capital gains arising from sale of a residential property if reinvested in another residential property.
* **Applicability:**
* **For LTCG only:** If the gain is LTCG, you can claim exemption by reinvesting the gains in another residential property within specified time limits.
* **For STCG:** No exemption is allowed under section 54.
---
### 3. **Loan Deductions on Housing Loan**
* **Deductions under Section 80C and Section 24:**
* **Principal Repayment (Section 80C):**
* Maximum deduction allowed up to **₹1.5 lakh** per year.
* Only principal repayment amount qualifies.
* **Interest on Housing Loan (Section 24(b)):**
* Deduction up to **₹2 lakh** per year for self-occupied property.
* If the property is rented out, the entire interest paid can be claimed as a deduction (subject to loss from house property limit of ₹2 lakh per year).
* **If you have claimed deductions on principal and interest and then sell the property after 4 years:**
* There is **no need to add back these deductions to your income**.
* The deductions claimed in earlier years remain valid and do not affect capital gains computation.
---
### 4. **House Rent Allowance (HRA) Claim**
* **If you own a house but live in a rented house, can you claim HRA?**
* Yes, you can claim HRA exemption if you pay rent for your accommodation.
* **How much HRA exemption can be claimed?**
The least of the following three amounts is exempt from tax:
1. Actual HRA received.
2. Rent paid minus 10% of basic salary.
3. 50% of basic salary if living in metro city; 40% if in non-metro city.
* **Rent Received on Own House:**
* If you own a house but it is rented out, rent income must be declared as **income from house property**.
* You cannot claim HRA exemption for your own house if you don’t pay rent.
* If you pay rent for another house, HRA exemption can be claimed on that rent.
---
### Summary Table:
| Query | Answer |
| -------------------------------- | -------------------------------------------------------------------- |
| Holding period for LTCG/STCG | More than 36 months = LTCG; else STCG (calendar months) |
| Exemption on STCG | No exemption on STCG for reinvestment in property |
| Loan Principal deduction | Up to ₹1.5 lakh under Section 80C |
| Loan Interest deduction | Up to ₹2 lakh under Section 24(b) (self-occupied) |
| Impact of loan deduction on sale | No need to add back previously claimed deductions |
| HRA exemption | Least of actual HRA, rent paid minus 10% salary, 40/50% basic salary |
---
If you want, I can also help with **detailed capital gain calculation templates** or **HRA exemption calculation examples**. Would you like that?
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