I have sold a flat and incurred capital gain of 13L. I have another flat that is under-construction, for which I have taken home-loan. Can I use the capital gain amount to settle part of the home-loan?
Ans: No, you cannot use the capital gain amount to settle part of the home loan on an under-construction flat. To claim capital gains tax exemption under Section 54 of the Income Tax Act, you must invest the capital gain in a new residential property or deposit it in a Capital Gains Account Scheme if the property is under construction. Using it to pay off a home loan will not qualify for the exemption.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in