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Can we claim the improvement cost

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Gulshan Agrawal

Student Others

20 Points Posted on 15 June 2023

I had purchased a flat in 24-01-2014 of rs 24lck

in 2018 I had taken the home loan of rs 16lck for construction of 2nd floor
now I am taking continuously benifit of interest and principle in my itr

in 14-11-2022 I sold out the flat in 40lck as per stamp. authority value

now my query is that can i claim the improvement cost of 16lck in capital gain?

Replies (2)

Quick Summary

If you've sold a property and incurred costs for improvements, such as adding a second floor, you can generally claim these expenses when calculating your capital gains tax. This means the cost of improvements can be deducted from your overall profit, potentially reducing your tax liability. Ensure you keep all relevant bills and invoices as proof of these expenditure.

B Durga Prasad

Student

20 Points Posted on 15 June 2023

Yes, you can claim the improvement cost of 16 lakh in capital gains. The improvement cost refers to the expenses incurred for the construction of the 2nd floor of the flat. You can deduct this cost from the capital gains you have earned from the sale of the flat. However, it is important to maintain proper documentation, such as bills and invoices, to substantiate the improvement cost.

To learn more about Income Tax Deductions List click here
For more detailed information, visit Swipe Blogs