Dear Sirs,
I am possessing a land on which have incurred Leveling Expense and then land is sold, My Query is whether such leveling expense be capitalised or not? While calculating Capital Gain whether such expense be included in cost of improvement or Expenses? Kindly revert on the issue.
Yes. Land levelling expenses should be capitalised as it can be treated as Land Preparation Cost
What about capital gain treatment?
If it is a land, then levelling a land adds value to the property, and therefore it will be considered as an improvement. The cost of levelling shall be treated as cost of improvement in computing capital gain.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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