25 June 2009
Please resolve the query -- I had bought a flat in 2004 for 25 lakhs that I sold off in June 2008 for 45 lakhs. In the Meanwhile I had booked a independent house in Feb 2006 for 65 lakhs for which I pay EMI with 7.5 lakhs as interest per year and 2.5 lakhs as principal repayment. This property was registered jointly in my name and my wife's name in April 2008. I have further invested ~10 lakhs in the interiors of this house in the past 1 year. Assuming I made 20 lakhs as long term capital gains from the sale of my flat, can I nullify the same against the 10 lakhs I have spent on interiors and the EMI that I pay for my new house?
If you go by the spirit of law you are not eligible to claim deduction u/s 54 of income tax act because it is clearly stated in law that if you have Long term capital gain and the same has either been invested in the purchase of new property or will construct a new one in upcoming three years only then you will be eligible to claim deduction till the time the amount of Gain should be kept at separate account with the bank.
26 June 2009
Your query is incomplete. First of all this is a long term capital gains as per the dates mentioned by you. Second Please tell that how much out of Rs 20 lac of the capital gains is invested in the purchase of new house of Rs 65 Lac then only some one can tell you the right answer.
CAclubindia
