House loan repayment

Mr. Victor

no problem you can pay bank loan with the sale proceeds of your existing house.

the tax liability arise or not it depends on sale proceeds amunt of old house and some other factors. 

Thank you for your reponse.

My sales from the old house will be lesser than the loan for the new house, hence just checking if I can get a complete exemption on the entire amount or would there be a LTCG component

Thx

BV

no problem carry on

best

LTCG arising out of sale of property cannot be used to pay of home loan of new property because you are not buying any new property; you are just repaying home loan for a property which you already bought.

I read somewhere that as long as both transactions are in the same year, it can be considered. Is that a correct understanding of the section? Please advice.

as per section 54 of IT Act 1961 ,

we can purchase house 1 year before or with in 2 year from the date of transfer of property

hence in case of victor he is buying (with bank loan) house prior to 6 month before the date of transfer of old house 

 PERFECTLY RIGHT 

law does not prescribe anything that which fund should be used in buying property 

refer following case law  

ISHAR SINGH CHAWLA V. CIT 2010 130 TTJ 

Let me know if i am wrong

Originally posted by : Belmond Victor
	I read somewhere that as long as both transactions are in the same year, it can be considered. Is that a correct understanding of the section? Please advice.

 it does not make any differecnce that both the transactions are in same year or not

both transaction can be in difference financial year.

Does not matter the victor will get the exemption in section 54 . As we have to considered the house purchased before one year of sale of residental house or after 2 year.