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Advice to sell house (Bangalore - India) and taxes applicabl

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vinay

21 Points Posted on 26 May 2010

I have bought a new house on a loan. I have a more than 3 year old own house which was also on loan. Now the old house loan amt is about 19 lacs and interest amount is gradually decreasing. I've repaying this loan for 4 years now. My new house loan EMI has started from 8 months.
I've been claiming income tax exemption as per the limit for my old house.
Now I am thinking of selling old house(already 3 years have passed after possession) and repay the loan completely. Suppose I get Rs 25 lacs for my old house, I'll utilize the amount to pay 20 lacs
-and for balance 5 lacs what will be the tax applicable?
- Do I need to invest that somewhere else?
- Is it a good idea to sell the old flat now if the things are not that bad?
- Once I close the old loan account, can i convert my new loan account to claim for income tax benefits? what is the procedure?
- is there any website which could give me more information on this?
pls help with answers.
thanks in advance.

Replies (1)

harish sharma

student

90 Points Posted on 26 May 2010

dear vinay

pointwise answers to your queactions

1.when u sell ur old house long term capital gain will arise and this will be the diffrence between net sales realisation and index cost of acquasition/improvment.this capital gain is chargable to tax @ 20%.

2.repayment of loan out of sales considration does not alter the above mentioned tax liability.

3.u can reduce your tax liability by investing this capital gain amt. in another house property u/s

54.(if u know more about secton 54 feel free to ask)

4.so far as the deduction of interest on loan of new house is concern u can take its deduction u/s 24b

regardless of the fact that u r selling old house or not.

5.for more details of statutory provisions wisit the site of incom tax department