Cost of acquisition for property

Dear Kavita,

the CoA is the actual cost inclusive of all charges including ST and MVAT...

the interest on the loan is not to be added to the cost, but is to be claimed separately under income from house property.

Incase you have any queries, please feel free to ask

How to handle Interest for loan when the flat is sold before 5 years?

I want to know how to calculate the Short Term capital gain from such transaction? 

can you please explain with heads for cost?

the interest for the pre construction period is to be claimed in 5 equal installments.

The STCG will be the Total Sale Consideration less the Cost of Acquisition. The sale consideration is to be also adjusted for the incidental charges such as brokerage etc. paid

Hi Ankit,

Thanks for your response.

So the Total sale consideration would also include any additional expense (such as electrical or repair/alteration inside the flat) ?

You are welcome Kavita,

Though the income tax allows addition of improvements to the cost of acquisition, you have to  see the nature of the alterations. If they are just routine expenses, the deduction may not be allowed, however, if it is material in nature, it shall be allowed….

But what is the nature of the alterations that you have done???

We have made some extra wiring and additional sockets and in the kitchen we have made modifications for modular kitchen.

That does not qualify for improvements…since these are routine in nature…

So you cannot add the same as cost of improvements…..

By the way, please don’t mind, but, you do not seem to be from a tax background is it??

Yes I am not from tax background. But I have received lot of help from this forum regarding my tax queries. 

All the experts on this forum have helped me a lot. :)

Hmm…I understood that…

I hope I was clear…incase there is anything..feel free to ask…

I am currently trying to calculate the STCG tax that I will have to pay for the sale of my property. It is 1.5 yrs old purchase. 

If I cannot claim the loan interest as cost of flat then I will have to pay tax on that amount as well. How can I reduce the tax amount?

Have sent you a Pvt. Msg...Pls check

Kindly clarify whether the cost of acquisition of property includes the cost of train travel tickets for the registration of property when the property is located at different city.