07 July 2009
I purchased a flat on 20.07.08 by taking loan from Bank, in addition to other savings. I sold my old house on 27.06.09, recently. Due to sell of house, Liability of long term capital gain tax arises.
My question is- To save the Capital gain Tax, Whether rules allow me to save the tax by returning the loan taken last year from the Bank? I have no other house except purchased last year.
07 July 2009
Hi, To claim the deduction u/s. 54, the residential house should have been purchased within one year before the date of transfer of house. i.e. it should have been purchased from 28.06.2008 to 27.06.2009. As you have purchased the property on 20.07.2008 you are entitled to claim the deduction u/s. 54. There is no need to repay the bank loan, even then you will get the deduction u/s. 54. The important thing was to purchase the house property within the prescribed time limit , whether from your own sources or from the bank loan, doesnt matter.
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