• Capital gain from sale of flat

I invested 8 lakhs in a flat   took loan of 2100000 lakhs.  Finally sold the flat for 4600000 lakhs. After repaying the loan i saved 1000000 lakhs. I have got 3100000 left.  Now i have to re invest how much to save capital gains tax. If it is 4600000 lakhs then can i take housing loan and re invest or i need full 4600000 of the sale price of the flat i sold.
Please advice
Asked 4 years ago in Capital Gains Tax from New Delhi, Delhi

I am not sure how you are left with Rs 31 L after repaying the loan your savings were only Rs 10 L. I am also not sure whether the flat you are selling is a residential flat or not.

Without getting into specifics, I can only say that you need to explore the exemption u/s 54 and 54F.

If you are eligible to claim exemption u/s 54, the amount of capital gain exceeding the cost of the new house only will be shall be the capital gains chargeable. Thus in the present case, if the amount of capital gain is less than or equal to Rs. 31 L, his investment of Rs 31 L will qualify for exemption.

If you are eligible to claim exemption u/s 54F, the amount that should be invested is the net consideration received. If the amount is less than the net consideration, the exemption will be proportionate to the amount invested.

The repayment of existing housing loan will not qualify for exemption u/s 54F.

B Vijaya Kumar
CA, Hyderabad
891 Answers
67 Consultations

5.0 on 5.0

I shall need more details such as date of purchase of the property, date of sale, agreement value of property both at the time of original purchase and recent sale.

Swapnil Patil
CA, Navi Mumbai
30 Answers
4 Consultations

4.6 on 5.0

Dear Sir

Please advice the date of purchase and sale of properties to advice you as there are different tax provisions for long and short term properties.


Ankit Jain



Ankit Jain
CA, New Delhi
32 Answers
3 Consultations

4.9 on 5.0

Under Section 54 of the Income Tax Act,1961 any longterm capital gain, arising to an individual/ HUF from the sale of residential property shall be exempt to the extent such capital gain is invested in the purchase of another residential property within 1 year before or 2 years after the date of transfer of property or construction of residential property within 3 years from the date of such transfer.

In the present case you have not mentioned the dates of purchase/ sale so as to determine whether it is long term capital gains or short term capital gain. Thus i assume this to be long term capital gains and give my opinion.

If you invest the capital gains in purchase of residential property then the entire capital gain shall be exempt.

Thus in the present case if you invest the capital gain which is arrived after deducting the cost of acquisition from the sale proceeds in purchase of residential property then you can save the capital gains tax.

Shyam Sunder Modani
CA, Hyderabad
1408 Answers
110 Consultations

5.0 on 5.0

It is important to know the dates on which the transaction has happened. Only if long term capital gains tax has been generated, reinvestment of full sale amount can be done to save on taxes.

Shashank Surana
CA, Chennai
60 Answers
4 Consultations

4.3 on 5.0

The question is incomplete without dates, being difficult to calculate first it is Short Term or Long Term. So the answer will depend upon the dates along with figures.

Vijay Kapoor
CA, Delhi
14 Answers
1 Consultation

3.8 on 5.0

Dear Sir,

Firstly you need to provide the exact dates and the exact figures. In your case the date is missing and the Figures are very haphazardly presented.

But still considering that your case is of a Long Term Capital Gain that is you have sold your flat after a period of 3 years. You are required to invest the whole amount of Capital Gain i.e (Sales Consideration - Indexed Purchase Value) in a span of 2 years from the date of transfer of property or construct a residential house property in a span of 3 years from the date of transfer.


CA Rohit R Sharma


Rohit R Sharma
CA, Mumbai
2104 Answers
92 Consultations

5.0 on 5.0

please clarify the dates of the incidences and proper amount.

Kavit Dilip Gadhia
CA, Mumbai
35 Answers

4.6 on 5.0

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