Gaurav 08 December 2015

Capital gain account

Dear Sir,

We selled one property @ 20 L and put it in LTCG account.

Now we have selected one property which on paper as per circle rate is 25 L but that building needs construction amounts approx 4-5 L so total would be 30 L, So I need a Loan of 10 L,

So Should I ask for 5 L of Home loan and 5 L of construction loan

Or Should I take 10 L of home loan and can use 10 Lac from LTCG account for purchasing property and 10 L for construction?

What documents do I need to show construction?

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5 Replies

siddhartha sinha 08 December 2015

If you have opened type A ltcg account then you can withdraw funds as many times you want for construction or purchase. The balance you may take loan from bank. Whether it is home loan or home construction it is same for bank. Difference being in construction loans disbursement is given in stages whereas in home loan bank gives lumpsum. In both cases bank will pay the builder. It is not clear what type of construction you require and in what stage it is now. If it is complete bank may also give mortgage loan against this property.

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Gaurav 08 December 2015

Dear Sinha Ji,

Many thanks for your advise !!!

But in my case I am taking a re-sell property, though already complete but requires much of mainteniance work. The seller will take his share (25) and leave and I need to do the repair work. So I need 25 to be in name of Seller and 5 in name of myself.

Or let me take home loan of 10 L + 15 L from my LTCG bank account and give it to seller.

Then the rest 5 L I will use in maintaince work from LTCG account but in that case how will I show it this 5L in tax? and is this approach feasible?