Cost of acquisition of residential property

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This query is : Resolved

Kapil Khanna (Querist)

12 August 2012 What all costs can be included in Cost of Acquisition of Residential property?
Please note that a home loan was raised to purchase the property.
Thanks,
Kapil

Pankaj Gupta

Pankaj Gupta (Expert)

12 August 2012 All the expenses that were incurred by the assessee upto the date of acquisition of property are included in cost of acquisition.
in case of loan ,,, all the interest paid before acquisition of property will be included in cost of acquisition and all the interest paid thereafter should be considered while computing income under the head house property.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

13 August 2012 My opinion differs from Pankaj.

Interest (pre-construction) paid shall NOT be allowed as cost of acquisition, as the same is allowed as deduction in 5 equal instalments while computing Income under the head Income from House Property.

Benefit of an expenditure is allowed only once and not twice.

Interest (both pre-construction and post-construction is allowed as deduction)

Further, principal repayment is also allowed as a deduction.

So, Cost will be the amount paid to acquire the asset + stamp duty + commission/brokerage.