Deposit in Capital Gains Account in case of Loss on Sale of Property

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  1. Sukritima

    Sukritima New Member

    I was allotted a house by authority in 2008 for which registry was done in 2010 since house was under construction,also possession on paper was given at the same time, however physical possession is yet to be taken. Considering indexation, there is going to be loss on property, wish below points to be clarified:
    1. Sale value is less than 50 lacs, is TDS still mandatory for buyer?
    2. Can I add notional holding cost to the actual cost while computing indexation?
    3. There is loss on account of sale, is it still mandatory to keep the amount recd in Capital gains accounts scheme for claiming loss?
    4. Since physical possession was never taken, is it still mandatory to consider the house as 'deemed let out' for showing income in earlier filed returns since I have been living in another self owned house?
    5. Can loss in this FY be set off from any other head of income?
     
  2. Karan Batra

    Karan Batra Well-Known Member

    1. TDS on Property is not applicable as the Transaction Value is less than Rs. 50 Lakhs
    2. Please explain this query in detail
    3. If there is a loss on sale - you are not required to deposit any amount in the capital gains account scheme
    4. If physical possession not taken - we cant consider this as deemed let out.
    5. Capital Loss can only be adjusted against other Capital Gains.
     
  3. Sukritima

    Sukritima New Member

    Thanks for reverting. As for point 2- Wish to clarify that though there was no loan taken as such no interest paid, however the notional interest loss on capital, some charges debited towards electricity/water charged by the authority, etc, can that be added to the COA. Also, would be making some amount as farmers' compensation to the authority. How this should be treated in the cost (which year's indexation shall be applied as this is yet to be paid or may get deducted from the sale value itself).
     
  4. Karan Batra

    Karan Batra Well-Known Member

    1. The Govt allows for indexing the Cost of Acquisition which will take into account the notional cost of holding the property
    2. The amount paid to farmers if mentioned in the purchase agreement from authority would be considered as Cost of Acquisition. Else, it would be considered as Cost of Improvement
     
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