Capital gain tax exemption

Querist : Anonymous (Querist) 10 August 2025 This query is : Resolved
We sold our property amid huge debt. Most of the amount was paid towards loan . Even to pay capital gain tax shortage is there. Is there any exemption from tax when most of the money is repaid to loan. Please clarify. Thanks in advance

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kavksatyanarayana (Expert) 10 August 2025
Unlike specific types of loans, such as home loans or education loans, personal loans typically do not offer tax benefits. Tax regulations may vary, so it's advisable to consult a tax professional for the latest information based on your location.

T. Kalaiselvan, Advocate (Expert) 10 August 2025
Paying off a home loan through capital gains can qualify as an exemption only if it is used to pay off a loan taken against a new house property. The requirement of Section 54 to claim an exemption is that the capital gains proceeds should be invested in a new residential property. So as long as the capital gains are used to pay off a home loan against a new house property, the taxpayer will be eligible for an exemption.
However, it is important to understand that if the capital gains are used to pay off existing or old home loans then such an exemption will not be available.

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