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Doubt regarding ltcg exemption

CA vinay (Chartered Accountant) (38 Points)

17 August 2016

One of my client purchased a semi constructed flat in Hyderabad by taking Home Loan from Bank in September 2015 (Flat is not registered in my client name upto now). Recently his father sold one of his residential plot and want to claim LTCG exemption by closing his son's bank loan and register the hyderabad flat in his name. Can my client's father get LTCG exemption if his father diverted the sale proceeds received by disposing his residential land and closing the bank loan and registering the hyderabad flat in his father name. Kindly suggest

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3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 17 August 2016

Sale Deed when registered in Father's name (son may be joint owner), payment made to present holder (along with repayment of his bank liability), entiles father to claim exemption u/s. 54F

Udgam Koomar (Tax Technologist) (1949 Points)
Replied 17 August 2016

If all docs in one single name and in order, exemption can be claimed

Tarak Shah (Chartered Accoutants) (105 Points)
Replied 17 August 2016

As per the provisions of Sec.54, Taxpayer can claim exemption. As of now the Sale deed is not registered in the name of your client, resulting he is not a owner of the property as of now. Once father of the client under go the process of Sales deed registration of the flat, he will become the owner of the property and claim the deduction u/s 54, subject to condition as mentione in the section needs to be satisfy.