Depreciation on composite land and building

Depreciation will be allowed on the purchase consideration of the ground floor plus the basement and not on the total amount.

Also, just have a look at thw wealth tax implications if any…..

Originally posted by : Ankit
	Depreciation will be allowed on the purchase consideration of the ground floor plus the basement and not on the total amount.   Also, just have a look at thw wealth tax implications if any…..

Thanks. You mean to say that we will be excluding the cost of land from the total consideration paid?
 

Yes….exclude the land cost from the same

If you have any other queries, please feel free to ask

Now my question is that how do we seperate the cost of the land from the cost of the portion purchased that includes basement plus a ground floor. Also, the first floor is already in the ownership of the assessee as a residential property..

No, i dont have the breakup of the purchase cost. What will be done in this case, when we dont know the seperate cost price of land, ground floor and the basement?

If there us absolutely no break up available, you will unfortunately take a valuation or then at the most, you can make a calculated assumption as to the value of the land

Thank you so much.

One more question..

now if this property is purchased by the husband through a loan with his wife as the co-applicant, what share of interest paid on borrowed capital can he claim as the busiess expense u/s 36(iii)?

agreement shows 50% ownership of each

wife is a house wife.

if purchase price is not indicating the cost of land and building separately, then depreciation shall be allowed on whole amount of purchase price ( including land). ( CIT vs Rajesh Export Ltd, 2006)