Capital gains on sale of flat

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 July 2014 Property 1 to be sold in October 2014
Property 2 purchased in May 2014
LTCG on sale of Property 1:75 lakhs
Property 2 purchased thru:
20 lakhs self funds & 80 lakhs Home Loan

Proceeds of sale used for pre-payment of home loan. Whether exemption u/s 54 still available on LTCG

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
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11 July 2014 YES , DEDUCTION IS AVIALABLE U/S 54. THE SECTION DOES NOT SPECIFY THAT SORCE OF FUNDS FOR PURCHASE SHOULD BE OUT OF SALE PROCEEDS. MOREOVER WHEN SECTION ALLOWS DEDUCTION FOR HOUSE PROPERTY PURCHASE BEFORE ONE YEAR ,HENCE SOURCE OF PURCHASE CAN BE DIFFERENT FROM SALE PROCEEDS