Save capital gains by pre-paying home loan?

Hi, We bought an expensive apartment last year on a home loan and are just about to close a land deal (sale). Can we avoid CG tax on this deal by part-paying the home loan on the apartment? Is that valid and recommended given that we took possession of the apt in spring 2011, and the land deal will be completed in 10 days. Or do you suggest some other options?. Thanks in advance for your help.

asked Feb 17 '12 at 21:45 by Ria 1111


If possession of flat was received within one year before date of transfer of land and purchase cost of flat is more than sale consideration of land, income tax can be saved fully u/s 54F.

However there are below conditions for section 54F applicability here:

  1. You should not be owning more than two residential house(flat/house/apartment) at the time of selling land.
  2. If total owned house properties are two, you should not buy another one within next three years. Or in next three years, total owned residential houses should not be more than two.
  3. New property should not be sold before next three years.

answered Feb 20 '12 at 20:24 by pankaj 5.2k320

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Asked: Feb 17 '12 at 21:45

Seen: 1,548 times

Last updated: Feb 20 '12 at 20:24