One of my client had purchased a Residential House for Rs. 3/- (1 + 2(Loan) . After 3 Yr. that house was sold by him in Rs. 4/-. Assume the LTCG arise from this sale is Rs. 1 (after indexation).
Now after this sale he rapaid the balance loan outstaning of Rs. 1 from the sale proceeds and Rs. 2.5 used for his personal purposes and balance Rs. 0.5 used for purchasing the new residential house. The cost of new residential house is Rs. 3. Balance Rs. 2.5 arrange by him from hoUse loan.
Now my questions are given as under:-
1. Can he take the tax benifit of Rs. 1 of repayment of loan otherwise than 80C.
2. Can he take the exemption under 54 for whole of the LTCG of Rs. 1 while he used only Rs.0.50 for purchasing of new residential property.
Plz give your suggestion in this regard with relevent provisions of Income tax Act, 1961
Thanks & Regards
CA. Mukul Jain
CAclubindia
