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Capital Gain on sale house property

15 September 2020

If a house is purchased and subsequently interior designing and furnishings are done, then at the time of sale of such house can:

(i) the cost incurred on designing and furnishings be included in the cost of house.

(ii) if so, can indexation be claimed on such cost incurred in designing and furnishings.

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6 Replies

Shiva Gupta (Paid Assistant) (155 Points)
Replied 15 September 2020

Yes.. if designing and furnishing was happened on or after 1-4-2001..

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sabyasachi mukherjee (27276 Points)
Replied 15 September 2020

Designing and furnishing does not constitute part of cost of house.
So such should be excluded from the same.

Surendra Kumar (31 Points)
Replied 15 September 2020

Why such works will not be considered as improvement work as furnishings adds to the value of property...

damodar sarda (CA Practice ) (184 Points)
Replied 15 September 2020

It is cost of acquisition if expenses were incurred at the time of purchase.
it will be cost of improvement, if furnishing expenses incurred at later stage.
But in both cases, u will get benefit of indexation

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 15 September 2020

It's considered as cost of improvement and Deduction is available from sale consideration as time of sale as Cost of Improvement.
Indexation is also available from the year in which such improvement was done.

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queryinsta054@gmail.com (234 Points)
Replied 16 September 2020

The expenses on Interior Decoration & Furnishings (ID&F) are incurred after purchasing the property and hence cannot be considered as cost of acquisition. For being considered as cost of improvement, the expenses have to be of such a nature that makes the house habitable for e.g. fixing of broken doors, repairing of electrical fittings and plumbings, constructing or reinforcing boundary walls etc. Expenses that result in mere increase in comfort or better look of the house are not taken as cost of improvement for e.g. installing ACs, putting false ceilings, painting or white washing walls.