my client had purchased a site & constructed a house taking home loan in 2001. he sold the same property in 2013. the unpaid loan amount on the date of sale was taken over by the buyer & settled. now while calculating the capital gain,whether the home loan principals/interests from 2001 to 2013 can be treated as indexed cost of improvement ?
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Cost of improvement u/s 55
Replies (2)
Generally,Interst paid on Housing loan shall be available every year under sec 24 and repayment of Housing Loan will be allowed as deduction under sec 80C to seller of capital asset.so he can not claim it as cost of acquisition at the time of for calculating Capital gains.
Furthur buyer can claim unpaid loan as cost of acquisition
Major repairs, reconstructions, extensions are included in the cost of improvement.
If you have already availed interest u/s 24, then interest paid will not be part of cost of acquisition.
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