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Ramalingam Kalirajan |8192 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Apr 04, 2024
Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Question by K on Feb 03, 2024Hindi
I have sold aproperty in December 2023 for 44.5lacs which was originally purchased for 2.7lacs in 1999. Now 1) An amount of Rs 40000 was incurred towards brokerage charges. Can I avail this as deduction from the total in tax calculation? 2) How to calculate the capital Gain Index for this amount? and 3) Can I add expenditure spent towards maintenance, additions made etc over theses years (for which no proof I can show) to get any tax deduction?
Ans: Brokerage Charges: Yes, you can deduct the brokerage charges of Rs 40,000 from the total sale proceeds before calculating the capital gains tax. The brokerage charges incurred in selling the property are considered as a legitimate expense and can be deducted from the sale proceeds.
Capital Gain Index: To calculate the indexed cost of acquisition for long-term capital gains tax, you need to use the Cost Inflation Index (CII) issued by the Income Tax Department. The formula to calculate indexed cost of acquisition is: Indexed Cost of Acquisition = Cost of Acquisition x (CII of the year of sale / CII of the year of acquisition). You can find the CII values for different financial years on the Income Tax Department's website.
Expenditure on Maintenance and Additions: Unfortunately, you cannot add expenditure spent towards maintenance, additions, etc., over the years without proper proof for tax deduction purposes. The Income Tax Department requires proper documentation and proof of expenses to claim deductions. Without proper documentation, these expenses cannot be considered for tax deduction.
It's always advisable to consult with a tax advisor or chartered accountant for accurate guidance tailored to your specific situation, as tax laws and regulations may vary. They can provide personalized advice and help you maximize tax benefits while ensuring compliance with tax laws.
Capital Gain Index: To calculate the indexed cost of acquisition for long-term capital gains tax, you need to use the Cost Inflation Index (CII) issued by the Income Tax Department. The formula to calculate indexed cost of acquisition is: Indexed Cost of Acquisition = Cost of Acquisition x (CII of the year of sale / CII of the year of acquisition). You can find the CII values for different financial years on the Income Tax Department's website.
Expenditure on Maintenance and Additions: Unfortunately, you cannot add expenditure spent towards maintenance, additions, etc., over the years without proper proof for tax deduction purposes. The Income Tax Department requires proper documentation and proof of expenses to claim deductions. Without proper documentation, these expenses cannot be considered for tax deduction.
It's always advisable to consult with a tax advisor or chartered accountant for accurate guidance tailored to your specific situation, as tax laws and regulations may vary. They can provide personalized advice and help you maximize tax benefits while ensuring compliance with tax laws.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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