24 July 2010
Whether interest paid on loan to construct the new house can be considered as expenses for computing exemption u/s 54. If yes please tell me where it is written and if there case laws please give me the names of case laws?
25 July 2010
Exemption U/s 54F is available to Individual and HUF assessees if the net sales consideration received by them from sale of a long term capital asset is invested in a residential house. Construction of the new house with borrowed funds is not intended by the legislature. It requires the investment up to the amount of Net Sales Consideration for exempting the capital gains. As such, in my opinion, the cost incurred towards interest would not be added in ascertaining the amount invested in the new Residential House.
CAclubindia
