Savings on capital gains on shares/stocks when used for home loan

[NewUser]

Hi,

I'm applying for a home loan presently. The salesperson mentioned something about no capital gains tax if the amount after selling the shares is invested in home loan.
Is this true? Is anyone aware of this and/or done this in the past?

 

[Deleted member 11974]

no as far as i know
capital gains long or short term can be ofset against capital losses long or short term itself

 

[Ankur dhanda]

Section 54F ITR.
Capital gains from stock / Mutual Fund if used for buying a property can get exemption

 

[gamersgzb]

Section 54F ITR.
Capital gains from stock / Mutual Fund if used for buying a property can get exemption

Correct +1 .. will be using this benefit when i file itr next year..

 

[NewUser]

Section 54F ITR.
Capital gains from stock / Mutual Fund if used for buying a property can get exemption

Thanks.

So essentially, during ITR filing, we can get the amount back by mentioning the same. Is there a limit to the exemption though?

Also, "buying a property" seems ambiguous. I mean will the exemption be applied if I pay EMI on property, or does it have to be the initial downpayment only?

 

[varun__goel_]

Thanks.

So essentially, during ITR filing, we can get the amount back by mentioning the same. Is there a limit to the exemption though?

Also, "buying a property" seems ambiguous. I mean will the exemption be applied if I pay EMI on property, or does it have to be the initial downpayment only?

Get in touch with a CA for proper clarifications.

 

[Deleted member 11974]

Thanks.

So essentially, during ITR filing, we can get the amount back by mentioning the same. Is there a limit to the exemption though?

Also, "buying a property" seems ambiguous. I mean will the exemption be applied if I pay EMI on property, or does it have to be the initial downpayment only?

down payment is what i guess it would be

 

[Ankur dhanda]

Thanks.

So essentially, during ITR filing, we can get the amount back by mentioning the same. Is there a limit to the exemption though?

Also, "buying a property" seems ambiguous. I mean will the exemption be applied if I pay EMI on property, or does it have to be the initial downpayment only?

For complete details only CA would be able to guide. I knew it as I myself had bought a house and used MF gains. So I’ll also at the time of filing will consult one.

 

[Ankur dhanda]

No limit I think, just that the property value should be more than capital gains

 

[gamersgzb]

No limit I think, just that the property value should be more than capital gains

And it should be first or second property you buy and you cannot sell it in next 3 years if you are using this section..

 

[Deleted member 11974]

from this fy capital gains reivestment is capped at 10 crores
and the upper limit for this is 2 prperties and or 2 crores if i am not wrong
also you cant sell it for the next 2-3 years otherwise it comes under stcg

 

[NewUser]

No limit I think, just that the property value should be more than capital gains

And it should be first or second property you buy and you cannot sell it in next 3 years if you are using this section..

from this fy capital gains reivestment is capped at 10 crores
and the upper limit for this is 2 prperties and or 2 crores if i am not wrong
also you cant sell it for the next 2-3 years otherwise it comes under stcg

Thanks for all the responses. From what I gather

1. I should get hold of a good CA for filing taxes, and they should be able to help
2. Can't sell the property for 2-3 years
3. Upper limit maybe about 2 Cr which is a lot more than the value of my property

The only thing unclear so far is whether this is applicable on the downpayment only or EMI, prepayments also are eligible. Someone mentioned it might be only downpayment, but need to know for sure such that I can sell at the correct time. Maybe I should consult a CA right away.

 

[Deleted member 11974]

prepayments are eligible only upto 1 year from date of redemption

 

[Ankur dhanda]

Thanks for all the responses. From what I gather

1. I should get hold of a good CA for filing taxes, and they should be able to help
2. Can't sell the property for 2-3 years
3. Upper limit maybe about 2 Cr which is a lot more than the value of my property

The only thing unclear so far is whether this is applicable on the downpayment only or EMI, prepayments also are eligible. Someone mentioned it might be only downpayment, but need to know for sure such that I can sell at the correct time. Maybe I should consult a CA right away.

Yes please consult a CA for full understanding and filing.
I just knew the basic section for it.
I’ll probably consult one during filing.
If you get hold of details before, do share.

 

[CARDBITRAGE]

Thanks for all the responses. From what I gather

1. I should get hold of a good CA for filing taxes, and they should be able to help
2. Can't sell the property for 2-3 years
3. Upper limit maybe about 2 Cr which is a lot more than the value of my property

The only thing unclear so far is whether this is applicable on the downpayment only or EMI, prepayments also are eligible. Someone mentioned it might be only downpayment, but need to know for sure such that I can sell at the correct time. Maybe I should consult a CA right away.

In addition to all that you mentioned, section 54/54f is applicable if you own only one residential property on the date of sale of the asset and can be claimed ONLY ONCE IN YOUR LIFETIME. So keep that in mind and use the benefit wisely. That's all I want to say.

 

[NewUser]

In addition to all that you mentioned, section 54/54f is applicable if you own only one residential property on the date of sale of the asset and can be claimed ONLY ONCE IN YOUR LIFETIME. So keep that in mind and use the benefit wisely. That's all I want to say.

Thanks for the info. I think I'll sell max number of shares at one go in that case, and claim it all during tax filing. 'ONCE IN YOUR LIFETIME' puts some pressure and this would be my first apartment purchase.

 

[CARDBITRAGE]

Thanks for the info. I think I'll sell max number of shares at one go in that case, and claim it all during tax filing. 'ONCE IN YOUR LIFETIME' puts some pressure and this would be my first apartment purchase.

I don't want to say much publicly and blatantly, but given the nature of Real Estate transactions in India, you can benefit a lot if you plan carefully. Also, don't unnecessarily sell your equity holdings for this benefit, unless it is an emotional investment(home). The upside in the RE market is less than that of the stock markets. I would rather use the benefit to write off/defer the CG on the sale of an existing residential property(as an asset) than equity.

 

[thanix]

Thanks for the info. I think I'll sell max number of shares at one go in that case, and claim it all during tax filing. 'ONCE IN YOUR LIFETIME' puts some pressure and this would be my first apartment purchase.

You need to invest the entire sale proceed for full exemption like say 20L worth of shares sold means you need to show investment of entire 20L and not just the gains. If you are going to use partially, there is some calculation and exemption will be only partial. Not possible to claim anything ever after in 54F in lifetime like prepayment in subsequent years, etc.

This has got nothing to do with your EMI. Just use it as your share for home purchase.

Also there is nothing to claim it back like TDS. You need to fill the correct sections in ITR for capital gains to show nil tax from capital asset sale.

 

[NewUser]

I don't want to say much publicly and blatantly, but given the nature of Real Estate transactions in India, you can benefit a lot if you plan carefully. Also, don't unnecessarily sell your equity holdings for this benefit, unless it is an emotional investment(home). The upside in the RE market is less than that of the stock markets. I would rather use the benefit to write off/defer the CG on the sale of an existing residential property(as an asset) than equity.

I don't understand the last line, but thanks for the concern. Yeah it's sort of an emotional purchase as in I'm looking to buy a home to live(the rents in my locality have skyrocketed), so not an investment. Anyway the real estate bubble here is waiting to burst anytime now.

You need to invest the entire sale proceed for full exemption like say 20L worth of shares sold means you need to show investment of entire 20L and not just the gains. If you are going to use partially, there is some calculation and exemption will be only partial. Not possible to claim anything ever after in 54F in lifetime like prepayment in subsequent years, etc.

I get that. I'll settle the entire amount obtained from selling shares to the property only. Thanks for the confirmation.

This has got nothing to do with your EMI. Just use it as your share for home purchase.

I meant after possession of the flat, if I settle an EMI using the money from shares, will this scheme be still applicable(no capital gains by selling the shares)? This money also goes towards home purchase. Similarly, one fine day, if I decide to sell all shares and pre-pay huge chunk of loan, will this scheme be still applicable there? [I can do it only once in lifetime, so need to think this through and weigh all possible options].

 

[thanix]

I don't understand the last line, but thanks for the concern. Yeah it's sort of an emotional purchase as in I'm looking to buy a home to live(the rents in my locality have skyrocketed), so not an investment. Anyway the real estate bubble here is waiting to burst anytime now.


I get that. I'll settle the entire amount obtained from selling shares to the property only. Thanks for the confirmation.


I meant after possession of the flat, if I settle an EMI using the money from shares, will this scheme be still applicable(no capital gains by selling the shares)? This money also goes towards home purchase. Similarly, one fine day, if I decide to sell all shares and pre-pay huge chunk of loan, will this scheme be still applicable there? [I can do it only once in lifetime, so need to think this through and weigh all possible options].

Sorry I don't know. Please consult a CA and get advice.