Interest paid on home loan as cost of acquisition

Hi

Please share the date of allotment. I think your capital gains shall be long term. Date of allotment is the relevant date for considering date of acquisition of the house property.

Please share the date of allotment for further answers.

Dear Sir,

- Date of possession can be deemed as date of ownership of the property if the same was not registered at the time of possession of the property. In your case assuming the date of registration was beyond the date of ownership of the property therefore the sale would result into short term capital gain.

- To claim benefit of interest on loan, property should have been acquired within five years from the date of borrowing. It is better to file revise return and reverse the deduction of Rs.2 lacs and claim it as cost of acquisition which will be more beneficial to you.

- Yes you can add the interest on loan to the cost of acquisition if no other benefit is taken under other sections of the law.

Thanks

Hi,

Yes this transaction will lead to short term capital gains for you.

You can add the interest on loan to the cost of acquisition if no benefit has been availed u/s 24 or 80c. You will also be liable to pay taxes on the 2 lakh exemption availed earlier. However you can file a revised return and add that as well to the cost of acquisition.

Regards,

Nikhil.

Thanks

Hi,

Firstly, if you have bought the house in 2011 and got the allotment letter at that time, then it will be a long term capital gain tax and not short term.

Further, in my opinion you can claim interest of 7 lacs as cost of acquisition. However, there are divergent view of this issue.

You don't need to reverse the benefit of 2 lacs.

Hi,

Hope you are doing well !

Yes, you can include Rs.7 lakh interest paid in cost of acquisition of flat if no benefit is taken under any section.

You do not need to reverse the rebate.

Could you please share the date of allotment letter?

Thanks & Regards,

Payal Chhajed

Hi,

As you have incurred the interest cost, the interest component shall be added to the cost of acquisition.

The total interest paid by you is 9 Lakhs whereas you have claimed 2 Lakhs as rebate/deduction. AS per Income Tax Act, Same expense cannot be allowed twice.

Hence as you have already take benefit/rebate of 2 Lakhs you shall be eligible to add only 7 Lakhs to your cost of acquisition.

Also, if the builder has issued allotment letter in 2011, you gain shall be considered as Long Term Capital Gain and you shall get the benefit of Indexation.

Note : You can also claim cost of improvement such as fencing, interior works etc. if any and reduce it from sale consideration.

Hope this resolves your queries!

Dear Sir,

You are eligible for include interest component of Rs. 7 lakh in the cost of acquisition.

You are not required to reverse the rebate benefit of Rs.2 Lakh.

As per my understanding, if the allotment letter was issued in 2011 then it will be considered as long term capital gain. You can take the benefit of indexation.

Warm Regards,

Karishma Chhajer

Hi

Yes 7 lacs can be included in cost of acquisition.

Hi,

Yes you can include 7 laks to the cost of acquisition of flat.