Is Service Tax and VAT paid on a flat included for Capital Gains?

Is Service Tax and VAT paid on a flat included for Capital Gains?

Hello, I sold a residential land and the capital gains is 66 Lakhs. I am now reinvesting this gain in a flat. The cost of flat is 58L. Registration charges is 3Lakhs (total 61Lkhs)

Vat and service tax is 4 Lakhs . So my total acquisition cost of new flat is 65Lakhs (58 +3+4)

In my Tax return, should I show Cost of new property purchased as 65L or 61 Lakhs?

If Iam able to show 65Lakhs, the my long term tax will come only on 1Lkh (66-65L)

Whether Vat and Service tax paid on flat purchase is to be included as cost of flat?

Asked 9 years ago in Capital Gains Tax

Yes you can include the VAT and Service tax in Cost of Acquisition

Shyam Sunder Modani

CA, Hyderabad

1409 Answers

164 Consultations

Talk to Shyam Sunder Modani

Thanks! Just one question and I would close and rate!  against 66L in the Capital gains account I will be able to withdraw 65L by way of check to builder.  1L and any interest accrued in it, can I withdraw and spent on interior work nmd then approach the assessing officer to close. Or will I have to pay tax on 1L + interest when closing account?    (For closing Type A savings account also asessing officer permission is needed?)

Asked 9 years ago

You declare 1 lakh or as per calculation income, pay tax and file returns.

Why to approach Assessing Officer when you did not get any notice.

Shyam Sunder Modani

CA, Hyderabad

1409 Answers

164 Consultations

Talk to Shyam Sunder Modani

I think there is mis understanding. I mentioned assessing officer, since the section says we can not close capital gains bank account without getting a approval on Form G from Assessing officer.  (So what I said is that after taking out remaining 1L amount from bank, even for a Type A - (Capital Gains Savings account) approval is necessary to close the account?        What happens if we keep the account as it is without closing  after withdrawing balance?)

Asked 9 years ago

Yes, you can include these taxes as a part of your cost of acquisition.