Computation of cost for capital gain
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
24 February 2013
I have purchased a flat 3 years before.
say at Rs.100/- out of which I had taken Rs.40/- as loan and was paying EMI to the bankers.
Today I want to sell my property, what all components should form part of my Cost
1. Rs. 60/- which I had invested.(This wil be added for sure)
2. Rs.40/- which I had taken loan, and now will repay back to the banker, will that be also added in my cost.
3. Also the EMIs which I had paid to the bankers were more towards Interest as till date my capital outstanding payment is Rs.38/-, so will this interest component which I had already paid will it form part of my cost?
say at Rs.100/- out of which I had taken Rs.40/- as loan and was paying EMI to the bankers.
Today I want to sell my property, what all components should form part of my Cost
1. Rs. 60/- which I had invested.(This wil be added for sure)
2. Rs.40/- which I had taken loan, and now will repay back to the banker, will that be also added in my cost.
3. Also the EMIs which I had paid to the bankers were more towards Interest as till date my capital outstanding payment is Rs.38/-, so will this interest component which I had already paid will it form part of my cost?
CA PARAS BAFNA
(Expert)
24 February 2013
It is clear that 60+40= 100 is your cost.
.
In a recent judgment by the Chennai Tribunal in the case of ACIT v C. Ramabrahmam (2012) 27 taxmann.com 104 (Chennai – Trib.), interest on housing loan which was claimed as a deduction under section 24(b) was also deducted by the assessee under section 48 as cost of acquisition while computing capital gains from sale of such house property. Such treatment was upheld by the Tribunal.
.
So, calculated risk may be taken to treat interest on loans as part of cost of acquisition.
.
.
In a recent judgment by the Chennai Tribunal in the case of ACIT v C. Ramabrahmam (2012) 27 taxmann.com 104 (Chennai – Trib.), interest on housing loan which was claimed as a deduction under section 24(b) was also deducted by the assessee under section 48 as cost of acquisition while computing capital gains from sale of such house property. Such treatment was upheld by the Tribunal.
.
So, calculated risk may be taken to treat interest on loans as part of cost of acquisition.
.
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