Capital gain

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ashish singh chouhan (Querist)
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05 July 2012 sir i want ans and tax planning of a problem on Capital

Long term Capital Gain on sale of Residential house is Rs. 1400000
purchase of another Resi. house Rs. 1750000, for purchase of Residential house Assessee has taken housing loan of Rs. 1150000

how much exemption assessee can take u/s 54
and calculation their of . If any LTCG arises what is tax planning we can do

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 July 2012 LTCG is Rs. 14 lakh and investment in residential house is Rs. 17.50 lakhs.

Since the amount of investment exceeds the amount of capital gain, WHOLE amount of capital gain is exempt.

ashish singh chouhan

ashish singh chouhan (Querist)
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05 July 2012 sir but assessee has taken loan for purchase of house , but it act says that sale proceeds should be used for purchase of R.H.
assessee has used only 6 lakh for pur of house and balance amt used from loan

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 July 2012 It is not necessary that the assessee should use the sale proceeds to invest in the house.

Please read Section 54 carefully.

Section 54 DOES NOT say that the sale proceeds have to be utlised.

Section 54 DOES NOT use the words "SALE PROCEEDS" at all.

Accordingly, deduction shall be available for the full amount.

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ashish singh chouhan

ashish singh chouhan (Querist)
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05 July 2012 Thanks sir