Dilbagh Singh (CA) (50 Points)
17 January 2013
under which section we can take the benefit of penalty paid for non-payment of home loan??
Had it been case of interest paid on home loan, then we could take benefit under Sec. 24(b) of income tax act. Can we add this amount towards cost of improvement of house while calculating capital gain??
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 17 January 2013
By letter of law and spirit and scheme of the legislation, penalty paid for housing loan should not be allowable under section 24.
Regards,
Nikhil Kaushik
(Fellow CA)
(85743 Points)
Replied 18 January 2013
No u can not!! no section shall provide what u are looking for.
Kulwant Singh Khalsa
(CA STUDENT)
(105 Points)
Replied 19 January 2013
Agreed with Nikhil
Penalty is charged for non payment of loan amount which has no relation with the property and also penalty even does not add or alter anything to the property. Expenditure of a capital nature incurred in making any additions or alterations to the capital asset after the assessee had became its owner can form part of Cost of Improvement as per section 55.
So in this case you cannot add the said amount to the property as cost of improvement.
CA Prashant Gupta
(DGM (F & A))
(14068 Points)
Replied 19 January 2013
I don't think you can claim that.
it is default on your part, income tax doesn't allow that
CAclubindia
