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Vivek

Vivek Lala  |280 Answers  |Ask -

Tax, MF Expert - Answered on Sep 02, 2023

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
HIMAVI Question by HIMAVI on Jun 02, 2023Hindi
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Can Long term capital gains from shares be invested in Housing construction to avoid LTCG tax at 10%. or How to avoid LTCG Tax from the sale proceeds of shares.

Ans: Hello, you can keep the LTCG below 1L in one financial year to avoid taxes
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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Samkit

Samkit Maniar  |173 Answers  |Ask -

Tax Expert - Answered on Jul 24, 2024

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Hi Sir, Could you help me to understand, If below scenario is valid to get tax benefit. Please read all below four points before answering questions. Point1: Sale agreement date of apartment = Jan 2023. Point2: 60 percent of apartment cost(with self + home loan) paid to builder till now (July 2024). Point3: Suppose, I sold stocks(Sept 2024) and invested LTGC to finance remaining 40 percent of apartment cost through instalments (before this FY end Mar 2025). Point4: Expected possession date of apartment = Oct 2025 (Actual home registration date). Question1. Am I eligible to claim this LTCG tax benefit under section 54F in above scenario for FY24 -25? Question2. If I am eligible for LTCG tax benefit , Do we need to put LTGC amount in capital gain account till possession of property? Or capital gain account is not needed , as LTGC amount is already invested to finance the remaining 40 percent of apartment cost in this FY24 -25 ? Question3: If I am eligible for LTCG tax benefit , Can I use LTCG amount for prepayment of home loan in this FY24 -25 and get Section 54F tax benefit ? Questions4: If only option remain is to save in capital gain account for tax benefit in FY24 -25. I really want to avoid to save LTCG in capital gain account. In this case, Suppose, I sold stocks(After current FY e.g. Apr 2025) and use LTCG amount for prepayment of home loan. Can I get tax benefit in this case for F**Y25 -26(**Assuming possession date of apartment = Oct 2025)
Ans: At the outset let me highlight that LTCG and house property are contentious issues.

As far as eligibility of section LTCG benefit is concerned, it is available for purchase of house 1 year prior to transfer of long term assets (i.e. stocks and shares in this case) or 2 years after the transfer of long term assets. Assumingly, you sold the shares in September 2024 then ideally you can utilize the entire proceeds for purchasing the house property from September 2023 till September 2026. However, the property is registered as on January 2023, hence it may be difficult for you to claim the LTCG exemption.

Accordingly, post payment of 10% taxation over gains, you can prepay your home loan.

Please consult your CA before moving ahead.

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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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