Capital gains tax
N.B.Lal
(Querist) 04 October 2010
This query is : Resolved
i had bought a flat for rs. 85000 in the year1994.Now i am selling it in Rs. 22,00,000.
What will be my capital gains liability if i use Rs. 12,00,000 in repaying housing construction loan taken in the year 2008.
what are the avenues open to me for getting IT exemptions.
N.B.Lal
A V Vishal
(Expert) 04 October 2010
Assuming you have purchased the flat after March 1994, your LTCG is Rs.7,66,600 and tax thereon @ 20.6% is Rs.157,920/-. You can invest the amount of Capital gains in another residential house or invest in approved bonds like NHAI or REC bonds for a period of 3 years.
Rahul Chaudhary
(Expert) 04 October 2010
Though the query has already been answered precisely, I would just like to add that you may also claim deduction under Section 80C(2)(xviii)(c)for repayment of principal amount borrowed (upto Rs.100,000/-).
N.B.Lal
(Querist) 05 October 2010
Dear Mr Vishal,
Thanks a lot but should i assume that repayment of hse construction loan is exempted from long term capital gains.
Dear Mr. Rahul,
Thanks a lot but does limit of one lakh includes savings through other instruments like NSC etc.?
N.B.LAL
A V Vishal
(Expert) 05 October 2010
Yes, Repayment of loan can be claimed as deduction while computing your LTCG.
N.B.Lal
(Querist) 05 October 2010
one last querry pls-is tax chargeable at10% 0r 20%?
AMIT BAJAJ ADVOCATE
(Expert) 05 October 2010
Hi Vishal ji,
Plz check if deduction u/s 80C is available against LTCG. I dont think so. However if the housing loan was for construction of the property in question then the construction cost will be allowed as deduction that too as cost of improvement from the capital gains. But no 80C deduction is available against LTCG.
A V Vishal
(Expert) 05 October 2010
I never said that 80C can be claimed against LTCG, I just told that the loan repayment can be deducted from the total amount of sale consideration.
N.B.Lal
(Querist) 06 October 2010
Dear Vishal ji,
Is repayment of housing construction loan against some other property owned by same individual can also be claimed as exemption against LTCG in respect of some other house?
soumitra basu
(Expert) 10 October 2010
Dear Mr. Vishal,
May I enrich my knowledge by knowing from you how repayment of loan for house building shall be treated as expenses for the purpose of claiming Long Term Capital Gain.
A V Vishal
(Expert) 13 October 2010
Mr Basu,
Can a loan be treated as Income? If yes why and if no what is the reason(Logic), you will have the answer yourself.
N.B.Lal
(Querist) 18 October 2010
Dear Mr. Vishal,
I had taken the housing construction loan for other property,relying to repay it by selling the property in question. Logically my income from sale proceeds is being utilised in acquiring new property if I repay the loan and therefore I should get the exemption.
I will highly appreciate your considered opinion.
