Capital gain tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2015 Sir,
Assessee has availed a loan of say Rs. 5 lakhs which is utilized for land development. We can take the whole expenditure as cost of improvement in case of LTCG. My question is can we take interest paid on the above loan as cost of improvement?? If yes, then Whether Indexation will apply on such interest?
Thanx in advance

Amol S Joglekar

Amol S Joglekar (Expert)
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27 September 2015 Interest paid on the loan can NOT be taken as cost of improvement. Both the subjects are independent...say cost of improvement is Rs. X...out of that Rs. Y is taken as loan.
Cost of improvement is unmoved or unchanged,,it is still Rs. X
Rs. Y and repayment of Y has no bearing of whatsoever nature on X