MATHEW (PROGRAMMER) 10 January 2010
Sir,
I have a flat in Mumbai which I would like to sell and repay the loan of a recently purchased flat. The capital appreciation that I will get in the first flat will be around 400% in 7 years. Can I use it to repay the existing housing loan, instead of re-investing in another flat/house, with out paying the tax on capital appreciation ?
P.M.Mathew
A V Vishal (Advocate) 10 January 2010
You can repay the loan but the amount of repayment must be equal or more than the capital gain, however, if the repayment is less than the capital gains then tax will be payable on the difference.
Vineet (Director) 11 January 2010
Exemption u/s 54 of the Act is available to you if the new flat has been purchased within one year prior to transfer of old flat. e.g. If you register sale deed of old flat on 15th Feb 2010, then the new flat should have been purchase on or after 16th Feb 2009.
You can claim exemption from long term capital gain arising out of sale of old flat upto the sums invested in new flat (purchase price, stamp duty and registration, brokerage etc). The exemption is available to you irrespective of the fact that you utilise the sales funds in repayment of loan or not.
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