deductibility of interest on the land sale

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 May 2012 My client Has purchased Land in the year 2005-06 by talking loan of Rs 25 lacs.
Now he has sold the land at 50 lacs.
He has paid Around 10 Lacs interest to the Bank.

Querry: Can he Claim the Interest paid for year 2005 to 2011 Rs 10 lacs as deduction from the sale consideration of Rs 50 lacs

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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17 May 2012 Section 48 of the Income Tax Act provides that calculation of capital gain shall be made as under:

Sale Consideration
Less: Expenses incurred on transfer
Less: Cost of acquisition

Cost of acquisition means the cost actually paid to acquire the asset.

Accordingly interest on loan cannot be treated as part of cost of acquisition.

Moreover interest paid on loan is allowed as deduction u/s 24 while computing Income from House Property.

Double deduction cannot be allowed for a single expenditure.

Querist : Anonymous

Querist : Anonymous (Querist)

17 May 2012 Thanks it is resolved . Thanks to Mr Bharaswaj for giving expert comments.

Regards
CA Vipin Kumar jain

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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17 May 2012 You are welcome. You should use the thanks button to convey your thanks.

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