I request you to clarify the following point.
I am having a housing loan with an outstanding principal amount of Rs 10 lakh (The flat where I am presently residing. Housing loan was taken during the year 2017). I got capital gain by means of sale of other flat to the tune of around Rs 80 lakh. By repaying the outstanding housing loan of Rs 10 lakh can I save myself from paying capital gains tax?
Ans: Repayment of housing loan is allowed as deduction in two parts. First repayment of principal can be claimed u/s 80C (up to 1.5 lakh) and second payment of interest which can be claimed as deduction. Interest deduction is allowed subject to certain limits depending on the fact that house property is used for self-occupation or given on rent.
In addition to that you can save tax on capital gain by investing in another house property or you can acquire specified bonds, if you fulfill other specified conditions.