capital gain on sale of hsg property

Tax queries 709 views 4 replies

CA.Deepak Bagra

Self Employed

28 Points Posted on 14 September 2010

So my query is as per section 54 he has to invest the capital gain of Rs.10 Lacs. however in this case he is contributing Rs.5 Lacs only. The confusion is whether housing loan funding would be treated as our own contribution or not??

Replies (4)

rajesh dhawan

professional

37 Points Posted on 14 September 2010

Originally posted by : CA.Deepak

This case law will answer all your queries. Rajesh Dhawan (ThE OnE)

Mr. A sold his currect self occupied hsg property and having L.T.C.G. of Rs.10 Lacs. As per section 54 he has to invest the capital gain in buying a new house with in 2 years. Suppose He has bought a new house in 40 lacs and for that he got housing loan of Rs.35 Lacs. So his own contribution for new house is Rs.5 lacs only.

So my query is as per section 54 he has to invest the capital gain of Rs.10 Lacs. however in this case he is contributing Rs.5 Lacs only. The confusion is whether housing loan funding would be treated as our own contribution or not??

Rishab

A.C.A.

155 Points Posted on 14 September 2010

Yes, Housing loan funding would be treated as own contribution, as per Sec. 54.

Nowhere in Sec. 54, it is specified that the same funds to be utilised for purchasing new property, what if a person purchased property within one year before the sale, how can he use the sale proceeds at that time (while purchasing), which he received at later stage

JINESH SHAH

PRACTICING CA

151 Points Posted on 14 September 2010

yes... Rs. 40 lacs will be allowed as exemption

Santosh

Student ( Final Year - New )

348 Points Posted on 15 September 2010

Originally posted by : Rishab
	Yes, Housing loan funding would be treated as own contribution, as per Sec. 54. Nowhere in Sec. 54, it is specified that the same funds to be utilised for purchasing new property, what if a person purchased property within one year before the sale, how can he use the sale proceeds at that time (while purchasing), which he received at later stage

Agree with above