08 November 2010
I am a director of a pvt. ltd. company with auth. sh. capital Rs. 5 Lacs, subscribed capital Rs. 1 Lac and reserves and surplus of Rs. 25 Lacs. The company is in the process of selling. We are getting Rs. 25 Lacs as the sales proceeds of the company out of which Rs. 20 Lac accrue to me. Can I use this money to repay my housing loan and get benefit on long term capital gain applicable due to the sale of our shares of my company. Kindly let me know the other implications also.
08 November 2010
You can rapay the Housing loan from the proceeds. there is no bar on using this sale proceeds, however, no tax benefit can be obtained from this as you are not investing the amount in a house property. The investment has been maade at the time of purchaing the property, not at the time of making repayment of a loan on that property. So no tax breaks u/s 54F
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