I bought an under construction apartment in 2006 directly from a local builder and paid via installments (a total of 22.5 Lakhs) for which an agreement for sale was executed and installments were paid based on construction progress, I was also able to finance a part of the purchase via home loan from bank using the AFS as basis for 17 lakhs which I was able to repay with interest in around 5 years (by 2011). The apartment was registered in my name in 2008 with Sale deed reflecting only value of 7 Lakhs by builder (7.95 Lakhs including Stamp Duty and Registration cost paid).
Now I am trying to sell this property in 2024. I had the following questions:
1) What would be the Cost of acquisition for this flat I can use since Sale deed only reflects 7.95 Lakhs (with stamp duty + registration) but I actually paid 22.5 lakhs as per AFS to builder (I also have bank loan of 17 lakhs as proof)? I am not factoring the interest repayments in this calculation on loan for simplicity.
2) Can I show 17 Lakhs as Cost of betterment to be included if only 7.95 lakhs is allowed as Cost of acquisition in 1)?
3) Assuming that Indexation benefit is still available to me in current FY, What would be the indexed cost of acquisition (apply indexation factor 363/122 around 2.97) to entire 22.5 lakhs making it 66.9 Lakhs or (7.95*3, which is 23.6 Lakhs) + 17 Lakhs = 40.6 Lakhs. Please confirm the indexed cost of acquisition I can use to calculated LTCG?
4) Assuming indexation benefit is not available to me in current FY, what would be the unindexed Cost of acquisition for the apartment?
06 August 2024
1. the sales deed establishes the cost of the property. 2. Any other cost, at best, can just be shown as improvements. If the payments are made to the builder on record, it would be easy to establish this. 3. interest costs are no more included in the cost of the property or improvement. 4. same applies to stamp duty and registration charges. 5. assuming no changes in the finance bill, indexation is not permitted.
the actual costs paid excluding registration charges, stamp duty and interest costs is your cost. Cost of improvement again to be taken as actual money paid for it.
CAclubindia
