Can long term capital gain cover home loan & still save tax?

Tax queries 202 views 2 replies

My question is with respect to Exemption u/s Section 54 (Applicable to LTCG on sale of house property only).

Situation:

I own a property A for greater than 10 years and hence it comes under Long Term Capital Gain bracket. 

I take a partial home loan and purchase another property B today. 6 months from today, I sell property A. 

Can I use the money from sale of property A to cover the principle and interest on home loan for property B, without having to be the Long Term Capital Gain Tax?

My confusion is with the statement:

"The new house has to be bought one year before (under-construction property) the transfer of the first house or within two years after the sale. (For an Under construction property or flat , the construction has to be completed within three years of the transfer of the first property.)"

Thank You

Tushar

 

 

Replies (2)

Exemption under section 54 can be availed over LTCG by sell of property A , when house property B was purchased just six months before (condition of within one year before gets satisfied)

Yes u are eligible for exemption


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