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Calculation of LTCG

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Subbiah Mathurappan

122 Points Posted on 14 September 2020

I purchased a flat in 1997 by availing a home loan and closed the same in 2010. Now I intend to sell the property. While calculating LTCG whether interest paid on home loan during the tenure of the loan can be included for arriving cost of acquisition. Is there any specific section in IT act in this regard. Thanks.

Replies (2)

Quick Summary

This discussion explores whether interest paid on a home loan can be included when calculating the cost of acquisition for Long Term Capital Gains (LTCG) tax. While interest paid until construction completion can be capitalised, post-completion interest is generally not allowable. There's a noted controversy among tribunal rulings regarding this specific point, with some favouring the taxpayer and others the tax department.

abhay garg

Senior auditor

91 Points Posted on 14 September 2020

Interest paid by you on the housing loan till the completion of construction can be capitalised and treated as part of the cost of acquisition. However, interest paid after the completion of the construction cannot be treated as cost of acquisition and in your case interest can not be treated as cost of the acquisition

damodar sarda

CA Practice

98 Points Posted on 15 September 2020

The Delhi and Chennai Tribunal has given judgement in favour of assessee and allowed interest as deduction u.s 48 on the ground that both sec 24(b) and 48 are altogether different.
But Bangalore ITAT has given decision in favour of department.

So there is controversy in the matter...