Capital Gains

dhaval ranpura (Pursing CA Final) (47 Points)

06 April 2010  

Capital Gains (Relating to House Property)

Case:

I bought House 1 in 1998-1999 for 2 Lacs.

I bought House 2 in 2008-2009. I took a loan for the same and Rs. 10 Lacs of the Loan anount is still outstanding in the year 2009-10.

I sell House 1 in 2009-10 for 9 Lacs. And, I am using tat gain amount {surplus amount on sale of House 1 : 9 Lacs - 2 Lacs} of Rs. 7 Lacs for repaying my outstanding housing loan in the year 2009-10.


Query:

1. Will I get exemption from u/s 54 since I am investing the said gain amount within 2 years in a Housing Investment?

2. (not relating to above Q) Will I have to consider House 1 as DLOP for the period I held it in the year 2009-10 upto sale date; even though the same was under renovation, and was not in capacity to earn me rentals?