Tax Saving on Purchase of New Property/Flat:

1. Deduction under Section 80C:

   • You can claim a deduction of up to Rs. 1.5 lakh under Section 80C for the principal repayment of the home loan for the new flat.

2. Deduction under Section 24:

   • Section 24 allows a deduction of up to Rs. 2 lakh for the interest paid on a home loan for a self-occupied property.

3. Deduction for First-Time Homebuyers (Section 80EEA):

   • First-time homebuyers can claim an additional deduction of up to Rs. 1.5 lakh for interest paid on the home loan, subject to specified conditions.

4. Joint Home Loan:

   • If purchasing jointly, co-borrowers can individually claim deductions under Sections 80C and 24 based on their ownership share.

5. Capital Gains Exemption (Section 54):

   • If using the proceeds from the sale of a capital asset (like property) to purchase a new residential property, you can claim an exemption under Section 54.

Settling Capital Gains Tax:

1. Invest in Capital Gains Bonds (Section 54EC):

   • Invest capital gains in specified bonds within six months to claim exemption. The maximum limit for such investment is Rs. 50 lakhs in a financial year.

2. Purchase a Residential Property (Section 54):

   • Utilize the proceeds from the sale of a property to buy or construct another residential property to claim exemption under Section 54.

3. Invest in Equity Linked Savings Scheme (ELSS):

   • ELSS investments can help in settling capital gains tax by offering deductions under Section 80C.

4. Offset Capital Losses:

   • Offset capital losses against capital gains. Losses can be carried forward for up to eight years.

5. Pay Advance Tax:

   • Pay advance tax on quarterly basis if you have earned capital gains during the financial year.

Section 54 of Capital Gain:

Limitations under Section 54:

1. Investment in One Residential Property:

   • Exemption is available only if the proceeds are invested in one residential property.

2. Time Limit for Investment:

   • New property must be purchased or constructed within two years from the date of sale.

3. Value of New Property:

   • Exemption is limited to the cost of the new residential property.

4. Sale of New Property:

   • If the new property is sold within three years, the exemption claimed earlier will be reversed.

5. Holding Period:

   • Original residential property must be held for at least two years to qualify as a long-term capital asset.

It’s advisable to consult with a tax professional for personalized advice based on your specific situation. Tax laws are subject to change, and it’s crucial to stay updated with the latest amendments.