momin saifi (CA Final Student) (169 Points)
07 December 2011Please advise with related case study if any :-
I have capital gain from sale of assets other then residential house property of Rs 42 Lakhs.
Now I want to buy a property of Rs 42 lakh with the help of bank loan amounted to Rs 30 lakhs and 12 lakhs from capital gain.
So My question is that wether whole amount of caiptal gain exempt under section 54/54F or not ?
CA PARAS BAFNA
(Practising CA )
(33428 Points)
Replied 07 December 2011
You have capital gain from sale of assets other then residential house property of Rs. 42 Lakhs.
U/s 54F you have to invest entire sales consideration to get full exemption.
More ever, it is not advisable to take loan while purchasing a Residential House when the Purchase Price is less than the Sales consideration of Old House.
Take Loan , but only in a case where you are investing more than the sale value.
Resham
(Carpe Diem !!!)
(6535 Points)
Replied 07 December 2011
In order to avoid capital gain you need to invest entire sale proceeds either in the form of investment in the house property or depositing the amount for 3 years and subsequently using the same within 3 years to purchase house.
GOPAL AGGARWAL
(DOING NOTHING)
(1339 Points)
Replied 07 December 2011
Yes u have to invest the entire sale proceed if only and only if you do not have any other residential house to get the exemption u/s 54F
manish sharma
(ca final)
(110 Points)
Replied 08 December 2011
banl loan deduction is not available.
MAHENDRA KUMAR BAGRECHA
(FCA)
(1402 Points)
Replied 10 December 2011
Section 54F says that before one year from the date of sale also is eligible for deduction, now if i want to invest before one year, then, without selling assets, how can i get the money? - from my own fund or from bank loan only.
CA Chirag Haraniya
(Chartered Accountant)
(902 Points)
Replied 10 December 2011
Agree with all...
Mahendra : Invest before one year is condition to get exemption of Capital gains which u have derieved in next year.... Suppose
if u have made invest ment in year 1 10Lakhs and
In year 2 if u earn capital gain of 20Lakhs ,
Then that 10Lakhs spend from ur own funds in previous years will also be elegible for capital gain...
Now
If u dont earn capital gain in year 2 then, Investment made in year 1 wont be elegible for capital gain exemption...
So for this purpose in previous year u have to made investment from ur own pocket only....
MAHENDRA KUMAR BAGRECHA
(FCA)
(1402 Points)
Replied 10 December 2011
Yes, We have to invest our own fund only if we want to buy residential house one year before. it will be very helpful if Any body can give any case law (specially karnataka court) where court has also agreed on the facts that one to one co relation is not necessary for investing sale proceeds of old property to get 54F benefit?
Shah Tarun
(Student)
(800 Points)
Replied 11 December 2011
CAclubindia
