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Capital Gain u/s.111A

CA Suraj Prasad Shaw (Chartered Accountant) (504 Points)

03 July 2010

Whether interest on loan paid (loan taken to aquire shares) can be included in cost of aquisition for computing Short Term Capital Gain u/s.111A.

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3 Replies

Amir (Learner) (4016 Points)
Replied 03 July 2010

Dear Suraj,

YES -

Interest on borrowals is deductible only if it is not allowed under section 57 - The interest paid on borrowings for the acquisition of a capital asset must fall for deduction under section 48. But, if the same sum is already the subject-matter of deduction under other heads like those under section 57, it cannot find a place again for the purpose of computation under section 48 - CIT v. Maithreyi Pai [1985] 152 ITR 247 (Kar.).

Venkateswara Rao Sapare (Accountant) (1500 Points)
Replied 03 July 2010

Originally posted by : Suraj Prasad Shaw
	Whether interest on loan paid (loan taken to aquire shares) can be included in cost of aquisition for computing Short Term Capital Gain u/s.111A.

Why do you want to include the interest ( paid on loan taken to acquire shares ) in the cost of acquisition of the shares? Not necessary, you can show it as a separate component while computing Short Term Capital Gains.