I bought a residential site in 1979 for Rs. 65,000. I got my house built there for Rs. 3.5 lacs in 1980-1981. I will be selling the house shortly.
I lost my account book and receipts that accounted for the cost of construction of my house. But the sale deed (when I purchased the house) states my payment of Rs. 65,000 received by the seller.
In the absence of receipts for Rs. 3.5 lacs spent for constructing the house, will a statement about the cost of construction issued bythat can be obtained from an approved building valuer be accepted by IT department, as the cost basis of the building on which indexation be applied for calculation of LTCG?
If this may not be acceptable, what other approach is available for accounting the cost of construction of the building in the LTCG calculation?
24 August 2012
obtain a certificate from panchayat/municipal body/corporation or any tax authority who is liable to collect the land revenue for valuation as on 1st april 1981, that will suffice.
24 August 2012
As a follow up, I would like to know if expenses towards improvement and maintenance of the building since 1981 (31 years) can be added to the cost of the building. If this would be allowed, what would be a reasonable annual amount that can be added to the cost of the building, while calculating the LTCG.
24 August 2012
advised not to add such annual maintanance costs incurred, as it does not add any utility of the property, but its charges towards upkeep of the property.
however if any additional construction which added the peoperty utility value has been done in any specific year, then it had been shown in your balance sheet for that year, look into the same and claim it.
CAclubindia
