• Sale of house and loan refund

Sir I have a flat that was bought ten years back.Then we bought a new flat where i am co applicant.We took heavy loan for new flat.Now we want to sell old flat and use money to pay loan .Can we do it without paying tax.please advice.My husband is hindu n i am Budhist
Asked 7 years ago in Property Law
Religion: Buddhist

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7 Answers

you can sell the flat and use money to repay loan on new flat

2) you can claim benfit of long term capital gains as you held flat for more than 10 years

3) LTCG is exempt for an individual on sale of a residential house property, if such gains (not the whole consideration) is utilised to purchase or construct another residential house.

4) It should be noted that the new house should be purchased within one year before or two years after the date of transfer.

5) if you have purchased new flat one year before then on sale of flat you would get benefit of LCTG

Ajay Sethi
Advocate, Mumbai
96748 Answers
7804 Consultations

1. Since you are investing the money from selling the proeprty then you are exempted from Capital Gain Tax.

2. Your respective religion has nothing to do in this matter.

3. Yes, you can usethe sale proceed in buying the new one. IT would be exempted if there remains no excess amount after investing in the new flat.

Devajyoti Barman
Advocate, Kolkata
23187 Answers
510 Consultations

Since the flat was purchased ten years back you can avail long term capital gain tax. To avail of this exemption, you must use the entire profit to either buy another house within two years or construct one in three years. If you had already bought a second house within a year before selling the first one, you could still avail of the tax exemption. Such capital gain exemption is reversed and the amount taxed as capital gain if the new property is sold within three years of the date of purchase/construction. This profit will be considered a short-term gain and taxed at the normal slab rates, not the 20% beneficial rate.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

You can sell your flat and repay your housing loan

But you would not get benefit of LCTG as flat was purchased 3 ago

Ajay Sethi
Advocate, Mumbai
96748 Answers
7804 Consultations

The long terms capital gains tax has to be paid whether you are repaying the loan on different property or using it for some other purpose.

Gain arising on transfer of capital asset is charged to tax under the head “Capital Gains”

Any capital asset held by the taxpayer for a period of more than 36 months.

T Kalaiselvan
Advocate, Vellore
86950 Answers
2334 Consultations

the new flat will be registered in our name tomorrow whereas houseloan on same started in Jan 2014 and is going on.Can we use the amount recieved by selling old flat in clearing loan without attracting IT

Income tax has nothing to with this.

It can be termed as LTCG.

The LTCG has to be paid if the provisions of section 54F has not been followed properly.

T Kalaiselvan
Advocate, Vellore
86950 Answers
2334 Consultations

Can we do it without paying tax.

yes, you have retained this flat for more than 3 years then you can invest sale proceed of this flat in another immovable property (flat) within 3 years from the date of its sale without paying capital gain tax. you have to mention it in ITR.

Shivendra Pratap Singh
Advocate, Lucknow
5127 Answers
78 Consultations

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