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.
