Repaying Loan through Short Term Capital Gain

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  1. Amal Nathan

    Amal Nathan New Member

    I have purchased a new flat & got possession in registered in March 2014 after taking home loan from SBI. Now I have sold my old flat on 09.03.2016 & received the money also. Capital gain is Rs. 12,05,000/-. Can I utilize the capital gain in repaying the existing loan on my new flat?
    Kindly guide!
  2. CA Umesh Agarwal

    CA Umesh Agarwal New Member

    Dear Amal Nathan,
    It seems difficult to save the Capital gains tax here, as the conditions to avail the exemption are not satisfied.
    However if you want to save the CG tax, you can opt to invest the amount of CG in REC/NHAI bonds within 6 months of sale of Long term capital asset.
    (Note: The views mentioned above are only for your information. Kindly seek expert advice before taking any action)
  3. Karan Batra

    Karan Batra Well-Known Member

    This is not a Long Term but a Short Term Capital Gain.

    No Deduction can be claimed from the Short Term Capital Gains and it would be taxable as per the income tax slab rates.
  4. CA Umesh Agarwal

    CA Umesh Agarwal New Member

    I think there are 2 properties in question; 1st was purchased in march 2014 and another i.e. older one which was sold in march 2016. Hence, the older property assumed to be LTCA.
    Please correct me if I am wrong.
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