Deduction in LTCG on equity tax against purchase of property?

- Yes you can claim exemption on LTCG on sale of equity shares for investment in the residential house property subject to the fulfillment of the conditions of the relevant section

- To avail exemption section 54F would be applicable. 

- Construction of the property should be completed within 3 years from the date of sale of the equity shares. Utilise the sale proceeds for payment of the remaining installments. Are you looking for exemption on repayment of loan amount?

- Interest is allowed on due/payable basis. Maximum limit is Rs. 2 lacs. Deduction would be allowed from the year in which construction of house would be completed or repayment of loan whichever is earlier. Interest from the date of borrowing till 31.03.20XXX immediately prior to the date of completion of construction or date of repayment of loan whichever is earlier is called pre-construction period interest. It is allowed in five equal installments. 

- Principal is allowed on paid basis. maximum limit is Rs. 1.50 lacs

- Deduct TDS on each installment. Before TDS deduction ensure residential status of seller/developer.

For detailed discussion you may opt for phone consultation

Regarding availing exemption for long term capital gains (LTCG) on equity shares by investing in a residential house property purchase, here are the key points:

1. Yes, you can claim exemption under section 54F of the Income Tax Act on LTCG arising from sale of equity shares, provided the net consideration is invested in purchase/construction of a residential house property.

2. Since this is your first residential property purchase, you meet the eligibility condition of not owning more than one house property.

3. The under-construction property you are purchasing qualifies for exemption. But the construction needs to be completed within 3 years from the date of equity share transfer to claim the full LTCG exemption.

4. You can use the capital gains proceeds to pay the pending installments for the property purchase. Make payments from the same bank account into which the equity sale consideration was received to evidence source of funds.

5. For the interest and principal loan repayment, deduction of up to Rs. 2 lakhs and 1.5 lakhs respectively is available under section 24 subject to overall limit of Rs 2 lakhs under both sections combined.

6. If construction is not complete, the deduction can be claimed from the year of repayment of loan principal or interest, whichever is earlier.

7. Disclose the details of LTCG on equity, amount invested in house property and exemption claimed under section 54F in Schedule CG of ITR. Furnish all supporting documents.

Please let me know if you need any clarification or have additional queries regarding claiming LTCG on equity shares against investment in a residential property. I would be happy to assist further.

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal