Cost of acquisition of residential property
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
Please note that a home loan was raised to purchase the property.
Thanks,
Kapil
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.
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.
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.
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.
CA VISHNU GAVKARE
(Expert)
13 August 2012
Agree with siddhartha.Sec 24 allows pre acquisition as well as posy acquisition interest as deduction.
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