Hello Radhika , Answer to your 1) Yes , he can claim exemption u/s 54 as in sec54 it is said the proceeds of old house should be utilized for purchase of a new residential house property. 370000 in this case, should be utilized for the purchase of new rhp ,then borrowed fund can also be utilized as much. 2)as a co owner he is eligible for deduction u/s 80C for principal payment to the extent it has been paid from his bank account. 3) The interest limit of rs200000 u/s 24b can be enjoyed by both husband and wife each. 4) Tax planning: if the income of husband is more , then show a loan given by wife to husband of the joint holding of the principal amount as per joint holding agreement. And then pay it from husband account and claim full 1200000 principal amt by assessee.

Originally posted by : Avinash Bhagat
	Hello its avinash bhagat n i am the student of cpt.... I want to ask u that .. Why closing stock is coming in trading account as it is real account n trading account contains only nominal nature only .?????

Hi Avinash,

Trading Account is one type of Control Account in which all Direct Expenses of Business (including Opening Stock as it is considered as expense) are debited. And all Revenue (including Closing Stock as it is cost of goods unsold) are credited.

 

It is only we are creating closing stock by crediting to Trading Account and Debiting Stock Account (Real Account which is shown in B/Sheet)

 

By the way You should look first about the topic category. Dont put on others topic. It breaks chain. Hope You can understand.

Originally posted by : Poornima M
	Yeah u can claim exemption even if new property is purchased out of borrowed funds provided it is purchased within the time limit specified. You can claim deduction of interest u/s 24b and principal payment u/s 80C. There is no double deduction bcoz principal does not include interest component.

 

Hi Poornima,

Yes New house is purchased within ALL Time Limit.

Is it not double deduction in respect of Principal Repayment Deduction u/s 80C and for Same amount we are claiming EXEMPTION u/s 54 which is Purchase Amount/Loan Amount) ??????

 

ANY CASE LAWS???

Originally posted by : Rajat Jain
	Hello Radhika , Answer to your 1) Yes , he can claim exemption u/s 54 as in sec54 it is said the proceeds of old house should be utilized for purchase of a new residential house property. 370000 in this case, should be utilized for the purchase of new rhp ,then borrowed fund can also be utilized as much. 2)as a co owner he is eligible for deduction u/s 80C for principal payment to the extent it has been paid from his bank account. 3) The interest limit of rs200000 u/s 24b can be enjoyed by both husband and wife each. 4) Tax planning: if the income of husband is more , then show a loan given by wife to husband of the joint holding of the principal amount as per joint holding agreement. And then pay it from husband account and claim full 1200000 principal amt by assessee.

Hello Rajat ji,

1. Not a single penny is utilised out of Sale Proceeds of Old House.

2. New House (is in the name of WIFE ONLY) is purchased by Home Loan (is in name of HUSBAND AND WIFE - CO-BORROWERS)

3. Husband is paying HOME LOAN INSTALMENTS FROM HIS BANK ACCOUNT. (HOME LOAN IS STILL RUNNING)

QUESTIONS.

1. Whether New House purchased FROM HOME LOAN is eligible for EXEMPTION U/S 54???

2. IF 1(yes), can we claim INTEREST u/s 24?? and Principal Repayment u/s 80C??? in the hands of HUSBAND.

3. IF 1(NO), can we claim INTEREST u/s 24?? and Principal Repayment u/s 80C??? in the hands of HUSBAND.

Originally posted by : Rajat Jain
	Hello Radhika , Answer to your 1) Yes , he can claim exemption u/s 54 as in sec54 it is said the proceeds of old house should be utilized for purchase of a new residential house property. 370000 in this case, should be utilized for the purchase of new rhp ,then borrowed fund can also be utilized as much. 2)as a co owner he is eligible for deduction u/s 80C for principal payment to the extent it has been paid from his bank account. 3) The interest limit of rs200000 u/s 24b can be enjoyed by both husband and wife each. 4) Tax planning: if the income of husband is more , then show a loan given by wife to husband of the joint holding of the principal amount as per joint holding agreement. And then pay it from husband account and claim full 1200000 principal amt by assessee.

Hello Rajat ji,

1. Not a single penny is utilised out of Sale Proceeds of Old House.

2. New House (is in the name of WIFE ONLY) is purchased by Home Loan (is in name of HUSBAND AND WIFE - CO-BORROWERS)

3. Husband is paying HOME LOAN INSTALMENTS FROM HIS BANK ACCOUNT. (HOME LOAN IS STILL RUNNING)

QUESTIONS.

1. Whether New House purchased FROM HOME LOAN is eligible for EXEMPTION U/S 54???

2. IF 1(yes), can we claim INTEREST u/s 24?? and Principal Repayment u/s 80C??? in the hands of HUSBAND.

3. IF 1(NO), can we claim INTEREST u/s 24?? and Principal Repayment u/s 80C??? in the hands of HUSBAND.

Hello Radhika , it will not lead to double deduction I think you are confused. in sec 54 we would get only deduction of amount of capital gain invested in new rhp or in capital gain account scheme I.e. if 370000 I.e. the capital gain in ur case should be invested to claim deduction which will also amount to 370000 and not 370000 + principal repayment under 54 and 1) if he has not invested required capital gain in new rhp , he cannot claim exemption of CAPITAL GAIN. you can claim interest and principal amt as was described by me in my previous comment. And I am in ipcc giving my first attempt may 15 on day after tommorow my tax examination is der. So I m 18 yrs old y don't need to call me 'rajat ji'

Hello Radhika , it will not lead to double deduction I think you are confused. in sec 54 we would get only deduction of amount of capital gain invested in new rhp or in capital gain account scheme I.e. if 370000 I.e. the capital gain in ur case should be invested to claim deduction which will also amount to 370000 and not 370000 + principal repayment under 54 and 1) if he has not invested required capital gain in new rhp , he cannot claim exemption of CAPITAL GAIN. you can claim interest and principal amt as was described by me in my previous comment. And I am in ipcc giving my first attempt may 15 on day after tommorow my tax examination is der. So I m 18 yrs old y don't need to call me 'rajat ji'

@ Radhika: I dont have reference of case law for this. this link might help u:

https://www.itatonline.org/forum/index.php?topic=796.0

Assessee will be eligible even if the s/he purchases new house using home loan finance.

@ santosh shukla how he will eligible under sec 54..? Sec 54 is the exemption of capital gain invested in new rhp .it will not be eligible if the new house property is purchased from only LOAN amount.

1. In my opinion, the very first condition is the house property has to be bought by the individuals jointly, and this should be in their joint names (ownership is important). Since this is not the case here the husband (unless he is deemed owner) cannot get interest and principal deduction from paying the housing loan.

2. Regarding the question as to whether he can claim deduction u/s 54 from capital gains towards flat purchased in the name of the wife, there are some favorable cases. eg Shirish Vinayak Godbole Vs. ITO (ITAT Pune), ITA No. 1320/PN/2010 dated 13-02-2013. But the problem here is that no amount of capital gain was actually invested in purchase of the wife's flat.

Pl refer to the In the following case:

[Deputy Director of Income Tax (International Taxation) Versus Jennifer Bhide Dated: 26 September, 2011 :Neither section 54 nor section 54EC of the Act mandates that the purchase of the property or investment in bonds should be exclusively in the name of the assessee. Though the name of the assessee’s husband is shown in the sale deed as well as in the bonds, as the entire consideration for acquisition of the same is flown from the assessee, in law the assessee’s husband has no right.

Once the sale consideration is utilized for the purpose mentioned under sections 54 and 54EC, the assessee is entitled to the benefit of those provision.(Para 8)]

Case not in favour: Kerala High Court in the case of CIT v. V. R. Desai, 197 Taxman 52.

Conclusion: The issue is highly debatable and there are Conflicting decisions on the subject.

No matter ,what ws the source of that investment the thing is that exemption should b allowed if the amount of capital gain is invetsd in a new house weather registrd under the name of his father or wife

Go and read sec.27 and refer case law of podar cement Ltd....google it (Case Law )

can the exemetion u/s 54 be claimed if the house is purchased within 1 year preceding the date of sale using loan amount? can the examption be claimed even if the entire investment is out of loan amount?