query on capital gains tax

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  1. MEENA KINI

    MEENA KINI New Member

    Greetings! I am purchasing a house by liquidating my fixed deposits in banks and taking a housing loan.I would like to know if i can use proceeds of sale of the exisiting house i am staying in to pay off the housing loan and make new FDR.s to replace the fds liquidated for the purchase of the new house by using the capital gains account which i will be creating on the sale of the existing house.Thanks in adavnce
     
  2. Nandakumar Gopalan

    Nandakumar Gopalan New Member

    Greetings. I received my share Rs 46 lakhs by selling father's property during January 2015. I opened a capital gains account in Nationalised Bank for Rs 24 lakhs in Feb 2015 , with an idea to construct an house in my plot. Balance 22 lakhs I invested in NHAI bonds during Feb 2015. Instead of constructing a house ,if I buy a flat can I withdraw these bonds now and utilize the total 46 lakhs plus bank loan to buy a flat worth 70 lakhs. Is it possible to encash bonds without interest?
     
  3. V K Khanna

    V K Khanna Active Member

    @Nandakumar Gopalan:
    The Capital Gain Bonds have a lock in period of three years. Once you have invested in these bonds, you can neither withdraw from the scheme nor raise any loan against such investment. Even if a relaxation is given in deserving cases, in my opinion one will have to pay capital gain tax first before withdrawal is allowed.

    @ MEENA KINI

    Sec 54 says that you can claim deduction from payment of tax, if you invest the LTCG in the purchase of a new residential house one year before or two years after the sale of the previous house and if the construction of a new house is involved the period allowed is three years. You can set off the housing loan raised for buying a new house provided the Capital gains arising out from the sale of the existing house have been utilised in a new house bought within a period of one year prior to the sale of the existing house.

    There is no provision under the law to invest the LTCG in FDs utilised earlier for purchase of a new house.
     
  4. Nandakumar Gopalan

    Nandakumar Gopalan New Member

    Thanks Mr.Khanna Sir for the clarification given for my question
     
  5. MEENA KINI

    MEENA KINI New Member

    Thanks for your help Mr Khanna Sir
     
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