Clarification for tax commutation for this year

dr venu 1
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Iam Dr Venugopal, presently at Delhi.

My Clarification for tax commutation for this year (in chronological Order)

  1. purchase of first house* Dec 2001 on housing loan for Rs five lacs. ( self occupied )

  2. Plot alotted in Bangalore on feb 2002 for net payment of rs Two lakhs

  3. cleared housing loan for Rs five lacs in Sep 2009.( self occupied )

  4. Plot in Bangalore sold in Aug 2010 for Rs Twelve Lacs ( LSCG= TEN LACS)

  5. SECOND HOUSE* PURCHASED IN BANGALORE in Sep 2010 ON LOAN FOR Rs 40 lacs (26 lacs registration + registration 6.5 lacs + 4 lacs commission + 13.5 lacs renovation & repair = 50 lacs : LSCG of TEN LACS re invested ) now shifted to & self occupied

    First house is presently vacant and for sale ( can take a notionalvalue of 22 lacs kindly guide me in computing tax exemption & rebate & claim

Pl intimate me about the documents required & the mode of savings EMI 36,762/-( 28,000 interest & 6,700 principal for LOAN of Rs 40 lacs) wef Sep 2010

residential-property long-term-gains ltcg home-loan income-tax
1 Answers

If you sell your first house, there will be again a long term capital gain arising on it. To save income tax on same, you will have to again invest the gain into another residential property (Section 54) or invest into capital gain bonds (Section 54EC).

Regarding Home loan principal and interest payment, you can claim income tax deduction for same. For interest max 1.5 lacs is exempted for a year, for self-occupied property. For principal repayment, max 1 lac is allowed under section 80-C (limit is combined with other 80-C investments like EPF, PPF, insurance etc.)

Pankaj Batra5212

Dear Pankaj should i have to again invest the gain into another residential property (Section 54) or As the new asset is over and above both of them (plot & old residential house) and if the proceeds of old residential house go to loan repayment will it not suffice Pl clarify

dr venu•

Income tax on Gain of plot sale is saved by buying second house in sep 2010. Now another property will have to purchased to save income tax arising from capital gains on sale of old flat. If both flat and plot would have been sold in same financial year, then capital gains could have been combined and saved by investing into a single property under section 54F. Loan repayment from sale proceeds does not have any tax benefits.

Pankaj Batra•
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