Capital gain exemption for repayment of housing loan

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 26 February 2021

The LTCG being used to repay the home loan is considered to be fulfilling the criteria set under Section 54 and Section 54F, and thus you are permitted to claim an exemption on the entire LTCG amount.

sabyasachi mukherjee (26047 Points)
Replied 27 February 2021

No exemption on 54 sec.
It's a seperate one.
Altogether different.

Kapadia Pravin (17249 Points)
Replied 27 February 2021

Plot money capital gain is not eligible for deduction under 54. Note that plot is not an asset chargeable under head Income from house property.

abhinav (student) (42 Points)
Replied 27 February 2021

Ok....so whether entire sale consideration received from sale of plot be utilised for repayment of housing loan and such utilisation be eligible for deduction under section 54F?????

Kapadia Pravin (17249 Points)
Replied 27 February 2021

Under 54F possible, if you do not own more than one residential house on the date of realisation of capital gains. That is sale proceeds of plot money.

sabyasachi mukherjee (26047 Points)
Replied 27 February 2021

Repayment of loan deduction available on a different section.

abhinav (student) (42 Points)
Replied 27 February 2021

Section 54F permits one residential house on the date of transfer of long term capital assets. Isn't it??

anil jain (Partner) (1067 Points)
Replied 27 February 2021

Avail under section 54F. Meet other conditions.

sabyasachi mukherjee (26047 Points)
Replied 01 March 2021

YOU CANNOT AVAIL
UNDER SEC 54F WRONG SEC QUOTED

Veeresh (Self employed) (123 Points)
Replied 01 March 2021

It seems 54F is also not eligible. Provision says he has to construct one residential house within 3 years or purchase 1 year before or 2 year after the date of transfer out of the proceeds of LTCA and such investment should be done before due date of return 139(1) otherwise he has to deposit the such amount in the account under CGAS with in due date of ROI.

Assessee should not own more than one residential house on the date of transfer.

anil jain (Partner) (1067 Points)
Replied 01 March 2021

Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.

54F. (1) Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, one residential house in India (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—

(a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45

(b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45

Provided that nothing contained in this sub-section shall apply where—

(a) the assessee,—

(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or

(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or

(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and

(b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property".

anil jain (Partner) (1067 Points)
Replied 01 March 2021

Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.

54F. (1) Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, one residential house in India (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—

(a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 ;

(b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45:

Provided that nothing contained in this sub-section shall apply where—

(a) the assessee,—

(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or

(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or

(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and

(b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property".