Capital Gains Tax on sale of House
I plan to sell a house which i purchased in the yr 2009. I have also taken possession of my second house in Aug 2015. The registration for the second home was done in 2012.
Can i use the gains made by the sale of my first house to pay the outstanding loan for my second home and claim capital gains tax exemption under section 54. The logic being I have taken possession of the second home within one yr (prior/earlier) of the sale of first home.
Pl advice thank you more
very rightly clarified by Nalini Ramaswamy more
Possession date is relevant only when it is prior to registration. You can not claim deduction for any loan repayment. more
I am in full agreement with Nalini Ramaswamy. The ownership matters and not the date of possession. So benefit of section 54F cannot be taken in this case. more
Dear Mr. Abhijit, The registration of the new property took place in 2012. Even though you received the possession of the same in 2015, you would not be able to claim the exemption u/s 54F as the purchase of the new property took place more than one year before the sale of your old property. The date of possession is not relevant. The Central Board of Direct Taxes (CBDT) has clarified that to qualify as an investment for construction under section 54F the crucial date is the date of allotment of flat by an institution and payment of installments was only a follow-up action and taking possession of the flat is only a formality. more
Thank you very much vikasji more