Can I consider the cost of home renovations in calculating my capital gains. I bought my house in 1994 for Rs.200,000. I completely renovated it by paying another $40,000 in 1994 before I moved in. THen I renovated it again in 2000 and 2006. House renovation only included painting, changing windows, doors, kitchen kaddappa, bathroom. It does not include any furniture or fittings. Can i use the inflation index for the year in which i renovated my house? I do not have any receipts as most of it was payment to contractors in cash.
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Capital gains
Replies (4)
Major renovation, extensions can be included in cost of improvement and accordingly indexed in computing capital gains. The question is in case your AO wants to look at the bills of these renovation, then what will you do.
Agree with Mr. Mihir ji,
Cost of improvement does not mean normal repairs.
As far as records are concerned, it is said that even Rs.100 petrol bill should be kept as documentary proof.
So without documentary evidences,ITO can disallow the improvement cost leading to tax consequences with interest as well.
Cost of improvement, as the name suggest, does n't mean normal repairs.
Read more at: /forum/cost-of-improvement-capital-gains-162444.asp
Read more at: /forum/cost-of-improvement-capital-gains-162444.asp
Cost of renovation cannot be considered as Cost of improvement as Cost of Improvement doesn't mean repairs n maintenance in case of calculating Capital Gain under Income Tax Act.
Agree with Aryan Sir...
You have no proof regarding that .....no matter how many major renovations have been done. Still can't be eligible in absence of evidences.
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