IS LONG TERM CAPITAL GAIN AVOIDABLE?

MR.A received certain assets & liabilities from his father as per will.( Father expired during previous year ).He gets a flat amounting to Rs.16,00,000/- along with other asset and loan on it from his father.Father has taken the loan for purchasing above flat , but the same flat was registered in the name of Mr.A

NOW ,in the previous year Mr.A has in total 2 flats. 1ST : his owned flat purchased 5 years back & 2ND: flat acquired as per WILL .In the previous year Mr.A sold his owned flat ( purchased 5 years back) .CAN Mr.A can exemption U/S 54 since he is paying the EMI on the loan & flat acquired through will. ( The flat is purchased by father (on loan) 8 months before the sale of flat by Mr.A i.e his son)

Replies (2)

Yes, he will get the exemption.

hello, i dont think Mr.A will get an exemption U/s 54 of I.T Act. the section clearly provides for the assessee to purchase a new house property, one year prior or 2 yrs after the sale of LTCA. in this case, Mr.A's father brought the house (registration of house in Mr.A's name is irrelevant for income tax Act). the loan was taken by Mr.A's father and bought by him. hence as per I.T he is the buyer. Mr.A aquired the house property by virtue of WILL only. the loan repayment made by Mr.A is also by virtue of Will only. As per the will the person who obtains rights on the inherited property also has to bear with the libilities on such property.

so Mr. A cannot claim exemption U/s 54 .

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