Hi,
I entered into an agreement with a builder to purchase a residential apartment in Greater Noida in 2006. I paid an initial amount of 10% of the total costs and remaining 90% was paid to builder by the bank through Home Loan. This property remained under construction till middle of 2011. I continued to pay the EMIs for the home loan during this period.
I was issued a allotment letter by the builder in June 2011 but I sold this flat to another person before the registration of it in my name. I also settled the loan amount with the bank before this sale. I paid some additional amount to the builder to transfer the flat into new buyers name.
Now my question is:
- What is my cost of acquisition (COA)? The initial amount (own share + bank loan + transfer fee to builder) or the amount paid by me over the period of time including interest on loan (own share + EMIs + loan settlement to bank + transfer fee to builder).
- I also received an interest of 6% p.a for 2 years period on the initial full purchase price from the builder at the same time when I transferred the property to new buyer in 2011. This was part of the flat buyers agreement. Is this receipt to be deducted from COA?
- I now realize that due to unclarity on the subject, I declared to my employer the interest payment on home loan (under construction) as deductible from my salary for 3 consecutive financial years (FY 2008-09, 2009-10, 2010-11). I understand this benefit is not applicable to under construction house property. Do I have to re-work my tax liability for the prior FYs and revise my IT returns? I have already been assessed for my tax returns for these years.
Shall appreciate for learned fellows to answer these in precise manner.
Thanks
Naveen
CAclubindia
