LTCG Tax

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Devendra (Querist)

05 June 2011 Mrs. X sold a flat purchased in July 2010 for22.5 lacs. Purchase value of flat was1.80 Lacs (without Registration) and2.50 Lacs (with registration). She has invested in a flat of10.5 Lacs of which she has taken a loan of7.50 lacs for the new flat. So for computation of Indexed cost of acquisition which should be taken inclusive of Registration or exclusive of registration?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

06 June 2011 In this case the Flat is a short term capital asset as it has been held for a period less than 36 months.

However for calculating STCG , Cost of acquisition includes registration cost also.
2.50 lac will be take nas COA.

Indexation benefit will not be available in STCG cases.

Further Section 54 benefit is also not available.

CA. Krishna K Neeraj

CA. Krishna K Neeraj (Expert)

06 June 2011 There is short term capital Gain in the instant case and not long term capital gain. Therefore benefits of indexation is not available to the assessee. However while calculation of STCG, you should take actual cost of acquisition i.e. purchase price with registration exp.

Cost of new house can not be deducted as benefits of section 54 is available in case of STCG.

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