long term capital gain

jasvinder (Querist) 02 February 2010 This query is : Resolved
if i say the house purchased on 2001 for rs 525000 sold on 2008 and before selling invested rs 200000 for repair and maintaince and than sold for rs 12 lac . will i get deduction on rs 200000 is my cost will come 725000 lac

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Vineet (Expert) 02 February 2010
Your cost will increase provided the repairs were not routine in nature and resulted in improvement, alteration, addition in the property.

Further the increase in the cost will not be in the manner you have indicated. The costs shall be indexed in the proportion of index value of year of sale vis a vis the year in which the cost has been incurred. So the indexed value of purchase price in 2001 and indexed value of improvement exp incurred in 2008 shall be differently calculated.

Raj Kumar Makkad (Expert) 02 February 2010
I do agree with Vineet

Kumar Thadhani (Expert) 02 February 2010
Provided the expenses relating to repairs and maintenance should be in the nature of capital expeniture no expenses relating to nature of revenue expenditure are allowable as cost to property.

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