xbox360

I had bought a flat in 2004 for 25 laks that i sold off in June 2008 for 45 laks. In the Meanwhile i had booked a independent house in Feb 2006 for 65 laks for which i pay EMI with 7.5 laks as interest per year and 2.5 laks as principal repayment. This property was registered jointly in my name and my wife's name in April 2008. I have further invested ~10 laks in the interiors of this house in the past 1 year.

Assuming i made 20 laks as long term capital gains from the sale of my flat, can i nullify the same against the 10 laks i have spent on interiors and the EMI that i pay for my new house?
Will appreciate any guidance in this regard.

abk

if you own only one property(house) then if the gains are invested in buying another house it is exempt from capital gain,but the proceeds have to be used only for that ,in the meantime they are supposed to be in a deposit in a bank.

xbox360

Thanks abk. 2 followup questions --
1) In my context, the fact is that the agreement for my house was in 2006 which is >2 yrs before i sold off my first flat. Will this offset the clause of buying a property either in the pat 1 yr or within the next 2 yrs from capital gains perspective.

2) Does only the 10 laks i spent on interior count as money invested back into property or does the EMI payment of 10 laks in the past year also count as reinvestment into property?

xbox360

Follow up questions --
1) In my case will the fact that the agreeement of my new house was done in Feb 2006 voilate the clause which states that a property is aquired either in past 1 yr or within next 2 years

2) Will the 10 laks i spent on interiors and the 10 laks i paid as EMI count as money reinvested in property and hence nullify any capital gains?