Long term capital gain tax on sale of house property

" (a) Is it necessary to buy house entirely from sale proceeds to avoid LTCG tax? If yes options availble to save tax.?"    

Ans.: Not necessary to purchase new house from sale proceeds of sold house only.

"(b) Can I claim deduction under sec. 24 income from house property for Intt. on housing loan paid during FY?"

Ans.: Yes

The first step for you would be to calculate LTCG on the sale of the old property. for assistance Use this https://finotax.com/income-tax/cgcalc website to calculate LTCG. 

To avail exemption you need to invest the entire amount of LTCG(mind you the gain and not the sale value of the old property) in purchase of new property. In your case if your LTCG is less than 7 lakhs then there is no need to pay any tax. However if it is more than 7 lakhs then the differential would be taxable.

Dear Sir

For question:

a) In order to avoid LTCG Tax you have to invest the whole amount of sale proceeds in specified investments mentioned in sections 54 to 54F of Income Tax Act. In your question Mr.A has invested only Rs.37.45 Lakhs the balance of Rs. 2.55 Lakhs (40Lakhs - (35+2.45) Lakhs) wil be taxable as Long Term Capital Gains.

NOTE: There is no need to purchase new house from sale proceeds of sold house only.But in order to avoid LTCG you have to invest the whole amount of sale proceeds ( Assuming Mr.A has other sources of income which exceeds Basic Exemption Limit )

b) You can avail interest on housing loan as deduction under section 24 of Income Tax Act.

Thnaks for your reply, however in continuation of question need clarification if balance of money Rs. 33 Lcas deosn't invested anywhere rather utilised for personal consumption /or transfer entry to friends relateives as interest free loan.Does this attract tax LTCG, if yes what will be the calculation ?

Thanks in advacne.

In order to avoid LTCG you have invest the amount (i.e., Rs.33 Lakhs) in any form as mentioned in Sections 54 to 54F of Income Tax Act.If you have utilised the same for personal consumption or provide an interest free loans to your friends/relatives the same will be liable to LTCG.

Calculation of LTCG:

Rs.33 Lakhs * 20% =Rs.6,60,000/-

So Rs.6,60,000/- is the tax payable on LTCG.

Hope I clarified your query.

Thanks.

Thanks Kiran for your prompt reply.

My pleasure sir.