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Should I sell my 13-year-old flat to repay a plot loan and claim capital gains tax benefit?

T S Khurana |367 Answers |Ask -Follow

Tax Expert - Answered on Sep 28, 2024

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more

Asked by Anonymous - Sep 25, 2024Hindi

Money

I have a flat 13 years old which I want to sell and repay the loan on plot. Will I get the benefit of capital gains tax if I close the plot loan

Ans: 01. I request you to clearly mention the details. When was the plot purchased, against which you took loan & now you want to repay the same ?
02. You are entitled to exemption, if you purchase a house, before 1 year or after 2 years, of sale of flat. In case of construction of house the time limit is 3 years after the sale of flat. This 3 year limitation is for completion of construction of house. When you start the construction is immaterial.
03. You may claim exemption u/s 54, subject to the condition that you complete the construction on the plot within 3 years from the date of sale of flat.
Most welcome for any further clarification. Thanks.

Asked on - Sep 28, 2024 | Answered on Sep 30, 2024

Thank you for your response Please see details Flat purchases in 2011 which I want to sell Plot purchased in March 2024. My plan is to close plot loan by selling flat. Not yet thought about the construction

Ans: 01. You won't be entitled to any exemption u/s 54 for purchase of plot or loan repayment on its purchase. Unless you construct the same (may be partial) no exemption would be available.
Most welcome for any further clarification. Thanks.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Hi Hi am 68 years old retired government employee in 2002 I had purchase a flat at 3.5 lack. Recently on May 2024 I have sell that flt on 21.50 .all the money I have given to my son who had purchased a new flat.can I pay capital gain tax.if yes then how much.

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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