jajati keswari mandal (Student) (135 Points)
12 December 2015One Assessee has transferred a Flat for Rs. 50L
My question is regarding cost of Acquisition & Cost of Improvement.
The assessee had paid total Rs. 15L towords purchase of Flat on installment basis.
The assessee had paid 1st installment of Rs. 1.5L on August 2007
and remaining 9 installment on quarterly basis of Rs. 1.5L each.
Whether 1st Installment can taken as Cost of Acquisition & remaining installment as cost of improvement?
Kindly let me know about the treatment of the above case.
jaya krishna
(Chartered Accountant)
(262 Points)
Replied 12 December 2015
no the amount can't be treated as a cost of improvement. it can be included in cost of asset (exculed interest in instalment).
jajati keswari mandal
(Student)
(135 Points)
Replied 12 December 2015
Please mention the section in which the treatement of this has been specified.
jajati keswari mandal
(Student)
(135 Points)
Replied 12 December 2015
I need Tax treatement not Accounting Treatement. Please let me know about in this regard with reference to Income Tax Act, 1961.
Ruchi
(CA)
(1410 Points)
Replied 12 December 2015
The instalments paid are not improvement costs but acquisition costs only. Hence, the entire amount should be indexed from the year of acquisition.
jaya krishna
(Chartered Accountant)
(262 Points)
Replied 12 December 2015
asset cost consider in income tax same as accounting at the time of aquisation. only deprecition rate may be differ b/w accounting and income tax.
Karthik.V.Kulkarni
(Chartered Accountant)
(594 Points)
Replied 12 December 2015
Karthik.V.Kulkarni
(Chartered Accountant)
(594 Points)
Replied 13 December 2015
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