Capital gains on property

509 views 3 replies

Guest

I bought a residential apartment on 10/Oct/2010 for 25 lacs (2500000). I took a loan of 20 lacs from HDFC to buy the apartment. Now due to relocation, I am planning to sell the apartment this month. The approximate sale price is coming around 35 lacs for the apartment. Here are my queries:

Will this be considered as short term CG or long term CG?
Can the housing loan be deducted from the capital gains for getting the house released from the bank. I plan to pay off the loan with the proceeds for the house
What other expenses can be deducted to calculate the capital gains tax?

Replies (3)

Pooja

194 Points Posted on 13 April 2013

Hi,

This would be considered as short term capital gain since the property is being sold within 36 months of purchasing it.

Also, you cannot deduct repayment of loan for calculating capital gain.

Also, you can claim deduction of the expenses incurred by you for affecting the sale. That expenses are to be reduced from the gross consideration by you and then further deduct the purchase cost.

Guest

Thanks.

However I am incurring a loss on the payment of the loan for the said property. Will this not affect the profit that I have made?

CA D.C. Bansal

Accounts Head

283 Points Posted on 13 April 2013

Since the property is held for less than 36 months, it will be considered as STCG. However, if you can arrange the registration of the same afther 6 months, it may be considered as LTCG.

Any expenses incurred in purchase/sale of house like registration fee, commission etc may be deducted while calculating the income from sale of house.

There should not be any loss to you on account of loan. Intt paid on this might have been claimed as deduction in the year when you incurred the same.

Please note that if you have claimed any deduction towards repayment of housing loan, it will be treated as income in the year of sales.