Do accrued interest will form cost of acquisition

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narendran c (Querist)
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09 June 2017 Dear Experts,

I plan to sell my house which is under staff housing loan.Interest on housing loan was not actually paid but claimed for every AY. Now the accrued interest amounts to Rs 12 lakhs which is to be paid to bank when the sale is executed. Can I add it to cost of acqusition for reducing capital gain.
Thanking you.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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09 June 2017 No you can't add such interest in your cost of acquisition. Only interest on loan before completion of house is to added in cost of acquisition

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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10 June 2017 Interest can be added to the cost of acquisition. Citation:- ACIT v. C. Ramabrahmam (2013) 57 SOT 130 (Chennai)(Trib).

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narendran c

narendran c (Querist)
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14 June 2017 Thank u sir. The capital gain is Rs. 15 lakhs after all deductions. But I have no funds in hand because of settlement to outside lenders. I plan to construct a new house by availing housing loan before 31st july 2018.( For claiming benefit under section 54 ). If the construction not completed with in due date for filing return (AY 2018-19), whether i need to deposit the remaining amount (unutilised capital gain) to CGAS. section 54 provides 3 years time limit for completion of construction, but for construction by bank loan funds, how is it possible to deposit in CGAS ? since the bank will release funds in stages and it can be utilised directly for construction. Please help me. Thanking You.

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