banner_ad

Can interest on plot loan be added to total purchase cost?

Tax queries 746 views 8 replies

Hello, 

I have recently purchased a plot for investment purpose only and I do not plan to build a house over it. I have taken a loan for the same. My question is that whenever I sell the land, will I be allowed to adjust the profit made with interest paid on the loan to reduce tax liability? 

 

Thanks, 

Replies (8)

No, not allowed under head capital gains.

Obviously yes

@ sabyasachi Sir not sure how obvious, another reply to my question suggests that I can't. 

No, You can't claim the interest on paid loan.
Interest on plot loan is a part of cost of construction
Read the query once again...

CAN YOU EXPLAIN

Hey there! Congratulations on your recent plot purchase – that's a smart investment move! Now, when it comes to taxes and selling the land, it's a bit of a mixed bag. The good news is that yes, you can indeed adjust the profit made from the sale with the interest paid on your land loan, but there are some caveats. Firstly, you'll be allowed to deduct the interest on the land loan as a business expense. Since your intention is purely for investment purposes, it's considered a business expense. However, there are specific rules and limits on how much you can deduct, especially related to land loan interest rates. So, it's crucial to consult a tax expert or accountant who can guide you through the process and help you maximize your deductions. Additionally, the profit you make from selling the land is typically subject to capital gains tax. The exact amount and rate may vary depending on how long you've held the property and the tax laws in your area. It's also important to note that while you can offset your profit with the interest paid, it doesn't necessarily mean you'll completely eliminate your tax liability. Again, seeking professional advice to navigate these waters is a wise move to ensure you're optimizing your tax benefits while staying within the legal boundaries. Happy investing! 🏡💰


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 29 April 2026
Manager- Finance and Compliance

Naveen Fintech Pvt Ltd

Kolkata

CA Inter

View Details
Company
Featured ARTICLESHIP 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details