Cost of asset

whether brokerage paid to different brokers should be added to cost of godown purchased
Replies (4)
Quick Summary
This discussion clarifies whether brokerage fees paid to brokers can be included in the cost of a capital asset, such as a godown. The consensus is yes, provided there's a clear link between the brokerage payment and the sale transaction, and proof of payment is available, ideally not in cash. Section 48 of the relevant tax act supports this by allowing deductions for expenditure incurred in connection with the transfer of a capital asset.

Yes u can add
Yes you can
Is there any specific provision

Yes, Section 48 reads as under:

 'The income chargeable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely :—

(i)   expenditure incurred wholly and exclusively in connection with such transfer;

(ii)  the cost of acquisition of the asset and the cost of any improvement thereto:....'

As explained by others above, brokerage paid to different brokers is allowable, provided (i) clear nexus between brokerage & sale  

transaction & (ii) proof of brokerage payment exists (preferably by mode other than cash) 

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