must solve this query

Dear experts. i hav bought a flat from builder. i started giving Rs. 100000 annually since 2000 as installment to builders. but possession was given to me in 2008. after that i have incurred Rs. 200000/- in 2009 for painting etc of house.
My query is: can i claim indextation on the installment paid at the time of sale? will this be allowed yearwise? will Rs. 200000/- paid for painting be treated as renovation etc and indextation be allowed?
pls reply if sure also quote the section.
thanks in advance.

Replies (4)

indexation available with effective date of registration instrument. if the amount spent on finishing and paint is capitalized in your balance sheet, then its part of capital now from the year of addition. but if u have ignored to add it in capital then its gone as expenditure

 i m individual . pls reply as my query

 

as per explation (iii) to section 48

“indexed cost of acquisition” means an amount which bears to the

cost of acquisition the same proportion as Cost Inflation Index for

the year in which the asset is transferred bears to the Cost Inflation

Index for the first year in which the asset was held by the assessee

or for the year beginning on the 1st day of April, 1981, whichever is

later:

 

hence indexation can be availed form the date of possession.

payments prior to possession is advance to builder, and during that period there was no house property held by you, but on registration date ( possession) in 2008 you got house property, so your capital gain will start from 2008-09. Regarding the expenses after possession, have u shown these expenses capitalized in house property in your return for subsequent years? if yes then these are added to your house property, if not then no addition.

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