Long term capital gain on sale of property
curious123
(Querist) 12 July 2014
This query is : Resolved
I have sold a property after 8 years of its possession. I know I can use the indexed value of initial cost price of the property for calculating long term capital gain. I can also include (a) any expenditure/expenses done on the property's improvement, renovation or maintenance (b) expenses on selling the property like agent's commission, lawyer's fee etc. My queries are:
1. Do I need to submit proof for the expenses on the property? If yes, most of the time either we do not keep the bill or we do not get bill for not-so-expensive civil works. So in this case, what is the provision?
2. Can property tax, society maintenance bills be included in the expenses?
3. How do we get the indexed value of these expenses spread over years?
Anirudh
(Expert) 13 July 2014
1. Only improvement to the capital asset - in the nature of capital asset (certainly not maintenance, property tax, society maintenance etc.) is permissible.
2. Naturally one has to have proper vouchers to back up the claim for improvement to the capital asset - otherwise it will not be permitted.
3. As and when you incur the cost of improvement, from that year onwards you will work out the indexed cost till the year of disposal. The original asset will be indexed separately. You have to aggregate the indexed cost of acquisition, and indexed cost of improvements to arrive at the total indexed cost of acquisition.
T. Kalaiselvan, Advocate
(Expert) 14 July 2014
very properly addressed by expert Mr. Anirudh, there is nothing more to add.
