Long Term Capital Gains on sale of property to repay bridge home loan for second property

I bought an under-construction apartment (first property) in 2002-03 and the construction was completed in 2005-06. I am currently staying in this property. I got another under-construction apartment (second property) registered in my name in June 2010, construction of which is scheduled to be completed in October 2011. I had to take a bridge home loan to fund the purchase of second property. Now I intend to sell the first property and immediately shift to the second property once it is ready. I intend to partly repay the bridge home loan taken for second property from the sale proceeds of first property. Will I be eligible for benefit under Section 54 since the construction of the second property is completed within 3 years from the date of transfer of first property? If yes, what are the other conditions to be complied with? If no, what are the other avenues for tax planning?

asked Jul 05 '11 at 19:35 by PKS 1111

You can claim exemption as per section 54, as a new property has been purchased and house is constructed in less than three years of sale of the old property.

answered Jul 05 '11 at 22:26 by pankaj 5.2k320


Know someone who can answer? Share a link to this question via email, twitter , or facebook

Your answer
toggle preview

Follow this question

Once you sign in you will be able to subscribe for any updates here

Markdown Basics

  • *italic* or __italic__
  • **bold** or __bold__
  • link:[text](http://url.com/ "title")
  • image?![alt text](/path/img.jpg "title")
  • numbered list: 1. Foo 2. Bar
  • to add a line break simply add two spaces to where you would like the new line to be.
  • basic HTML tags are also supported



Asked: Jul 05 '11 at 19:35

Seen: 3,036 times

Last updated: Jul 05 '11 at 22:27