Renovation cost of purchased house

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Querist : Anonymous

Querist : Anonymous (Querist)

18 September 2011 Can the renovation cost of purchased house be included in the acquisition cost for minimising/avoiding LTCG when this house is bought from the sale proceeds of a plot of land(Under section 54 F). Please explain.

U S Sharma

U S Sharma (Expert)
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18 September 2011 if the renovation cost increase the efficiency of capital asset, i.e addition to the property, then it is to be capitalized,

normal wear and tear/ maintanance/ painting etc are not capital inclusion.

Querist : Anonymous

Querist : Anonymous (Querist)

18 September 2011 Please explain in some detail with reference to my question.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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18 September 2011 Construction / purchase of house only qualifies for exemption under section 54F. The said section does not provide for exemption on investment in renovation or modification of an existing house.

Citation :- Mrs. Meera Jacob Vs. ITO (2009) 313 ITR 411 (Ker).

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Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2011 query is resolved

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