Long Term Capital Gain

Dear Pankaj Sir,

(1) I purchased a residential plot in June 2005 for Rs. 1.10 lacs & sold the same in 6.47 lacs in June 2010. (2) Considering the CII index the acquition cost of the plot is 1.58 lacs. The LTCG is 6.47 - 1.58 = 4.89 lacs. (3)I have purchased a house for 12 lacs in Jan 2011 out of which 9 lacs is the Bank loan. (4) My query is that "will my LTCG be exempted from tax up to the extent of Rs. 3.00 Lacs only ( that is my contribution in addition to the bank loan of Rs 9 Lacs =12 Lacs cost of resi house) Or the full LTCG that is 4.89 lacs will be exempted from tax.". (5) My argument is that the amt of 4.89 lacs should be not taxable because the condition is to reinvest the LTCG of 4.89 lacs which I have done by purchasing a house for 12 lacs. How does it matters that I have invested with my own funds or Bank's loan.

Thanks in advance Satya

asked Jul 26 '11 at 11:13 by satya 1222


Full 4.89 lacs will be non-taxable as you bought a new house with cost more than 6.47 lacs (sale consideration of plot). Amount paid by loan won't matter.

answered Jul 26 '11 at 20:33 by pankaj 5.2k320

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Asked: Jul 26 '11 at 11:13

Seen: 1,337 times

Last updated: Jul 26 '11 at 20:33