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?
Long Term Capital Gains on sale of property to repay bridge home loan for second property
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1 Answers
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.
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