payment to advocate for capital gain purpose

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This query is : Resolved

vijay singla (Querist)

16 July 2011 have purchased a plot from huda in 1991 for Rs. 3 lakhs and incureed Rs. 20000 during the period 1993 to 2005 for various legal expenses like advocate fees etc as huda was not developing the plot. i have also incurred Rs. 30000 for conveyance deed in 2010-11 . beside this i received Rs. 50000 as interest from huda for late development . now i have sold this plot for Rs. 23 lakhs . what will be my capital gain? is court exp will added to cost of acqusition and indextation of the same should be done year wise. is interest reced will be added to sale consideration for purpose of calculating capital gain . i aslo invested Rs. 12 lakhs u/s 54ec . pls reply if sure

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

16 July 2011 Cost incurred for the development of the property as well as for getting the title
are forming part of cost of improvement.
You can get indexation benefit on the improvement costs.
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Rs 50000/- received by you can not be shown as additional sales consideration. It enures from the property you have purchased. It is just like rent in nature. As it was told by SUDA as Interest, you can take it under the head IFOS.

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