23 August 2012
I bought a residential site for Rs. 85 lacs in Feb 2007. I spent Rs. 3.5 lacs to build a compound wall for the site and Rs.50,000 for a watchman quarter in June 2007.
I sold the site for Rs. 1 cr 30 lacs
Please advise me if the above mentioned expenses of Rs. 3.5 lacs and Rs. 50,000 can be added to the cost of purchase (or improvement of the property) while calculating capital gain. Will indexation be applied for the expenses?
24 August 2012
Yes the additional cost that you have incurred for errecting the compound wall and a watchman quarter shall form the part of cost of improvement and benefit of indexation shall be available on the same.
CAclubindia
