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Repayment of loan eligible for exemption u/s 54

Pawan Mittal (CA Final) (702 Points)

02 August 2014

Dear Experts

One of our client Mr. X has purchased a house property from Mr. Y one year ago. Mr. X paid the consideration by taking a loan from a ICICI Bank. Just one month ago Mr. X has sold another house property owned by him. If Mr. X uses the money of capital gains to repay the loan taken from ICICI Bank, will he be eligible for the exemption u/s 54?

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Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 02 August 2014

according to me, it should be allowed under 54. because current period capital gain can never be practically utilised in purchase of property in past. so i think that repayment of loan of property puchased a year ago should qualify for exemption under 54. ...... other views are also welcome.