Mihir (Wealth Manager) (5293 Points)
11 August 2014An individual purchased a property vide a sale deed duly registered. Society is yet to be formed. The builder asked for 1 lac as life-time maintenance. The home-buyer will pay this 1 lac and he will never have to pay any regular maintenance bill. Can this amount be treated as cost of improvement while computing LTCG when he sells this property?
Thanks.
Tribhuvan Aditya Singh
(Student as well as Self-employed)
(3710 Points)
Replied 12 August 2014
Anubhav
(Chartered Accountant)
(429 Points)
Replied 12 August 2014
Hi,
As per Sec 55- COI should be :-
Maintenance is not a capital expenditure even if it is paid in lumpsum.
Secondly it cannot be construed that this expenditure is incurred for addition / alteration to capital asset.
Hence as per AJH reading this should not be included as cost of improvement.
*Subject to any recent case law.
For any further query PM or mail me.
AJH & CO.
anubhavjain @ ajhco.in
Mihir
(Wealth Manager)
(5293 Points)
Replied 12 August 2014
Thanks T. A Singh and Anubhav for your reply.
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