I have a flat in my home town. I am planning to sell it to finance purchase of a new flat in Bengaluru. I have below question:
If I purchase new property in Bengaluru in 2024 (by taking bank loan) and sell my previous house in 2025, can I use the proceed from that house sell to make prepayment to the new housing loan and save capital gain tax. Please confirm.
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Yes, You can use sale proceeds to pay your loan for residential property purchased one year before the date of transfer of property ( sell of flat in home town)
Hey, @Manunited,
Yes as per section 54 of the Income Tax Act, you can use the sale proceeds of a residential property to buy a new one and claim exemption on capital gains tax. Provided the new property should be purchased one year before or 2 years after the date of sell.
Hope this helps!