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Save tax on LTCG under section 54 on new house home loan repayment or EMI

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Nitin

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20 Points Posted on 21 December 2023

To save or set off LTCG tax, the seller should purchase a residential house either 1 year before the date of sale/transfer or 2 years after the date of sale of long-term held capital assets like mutual funds. Does the Home loan repayment or EMI payment done within this specified period also be considered as the payment towards a new residential house or not.. in case any LTCG arises within this period can we setoff against the home loan payment or not.

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Quick Summary

This discussion explores whether home loan repayments or EMI payments made for a new residential property qualify for tax savings under Section 54 for Long-Term Capital Gains (LTCG). Specifically, it asks if these payments, made within the stipulated timeframes before or after selling an asset, can be used to set off LTCG tax liabilities. The aim is to clarify the eligibility of home loan expenses for LTCG tax benefits when purchasing or constructing a new home.