Are stamp duty & Registration charges part of acquisition cost of the property and total sum of these is to be indexed for arriving at the acquisition cost of the property for the purpose of calculating LTCG. Also please advise what does "expenditure wholly and exclusively in connection with transfer" consist of. Also, kindly advise if i have to deduct TDS of 1% on every instalment I pay to builder for an under-construction property(valuing more than 50 lacs) or i can deduct the whole TDS(1% of total) from the final instalment to be paid to builder while taking the possession of the flat.
Hi,
Yes, registartion charges and stamp duty value is part of cost of acquisition and should be indexed.
Expenditure wholly and exclusively in connection with transfer could be in the nature of brokerage paid to the broker.
You will have to deduct TDS from each installment.
Hi
Yes, stamp duty and registration charges shall form part of cost of acquisition of property and can be indexed. However, if 80C deduction was claimed in the year of purchase in respect of such expenses, then double deduction shall not be provided and these expenses shall not form part of COA.
Example of such expenses is brokerage paid for such transfer of property.
No, TDS deduction @ 1% shall have to be made on each and every payment made to the builder.
Hi,
Yes, registration charges and stamp duty value can be included in the cost of acquisition and should be indexed.
Expenditure wholly and exclusively in connection with transfer would mean all those expenses that were directly related to the transaction. Eg. Brokerage, registration charges, etc
Please deduct tds from each installment that you pay.
Regards,
Nikhil.
Dear Sir,
1) Stamp duty and registration cost are treated as part of cost of acquisition and will be indexed for the calculation of long term capital gain.
2) Expenditure incurred wholly and exclusively for the purpose of transfer is brokerage, commission and advertisement expenses.
3) Yes you need to deduct TDS @1% on every installment if the total consideration exceeds RS.50 lacs and needs to submit Form 26QB.
Thanks
1.Yes stamp duty and registration cost form part of cost of acquisation and indexation benefit is available.
2.Tds to be deducted on each payment,cannot be deducted at once.
3.Any expenses incurred specifically for that transaction is included in wholly and exculsively like brokerage cost incurred for transfer.
HI,
Yes Stamp duty and registration charges forms part of acquisition cost.
Expenditure wholly and exclusively in connection with transfer means those expenditures which if not incurred prior or during, the transfer itself cannot be complete like registration fee, legal fees or any charge which directly effects the sale transaction without which it wont be possible to carry out the sale.
Yes, it is required to deduct tax on every installment for property valuing more than 50 lacs.
Thanks & Regards,
Damini
Stamp Duty & Registration charges does form part of cost of Acquisition.
In case law
Gopee Nath Paul & Sons Vs. D.C.I.T. 3/8/2005 (2005) 147 Taxman629(Cal.)
It was held that,
any amount the payment of which is necessary for transferring the asset will be treated as expenditure incurred wholly & exclusively in connection with such transfer.
Further ,
Under section 194c people other than Individual & HUF are required to deduct TDS.
yes
Stamp duty & Registration charges are part of cost of acquisition.
Expenditure wholly and exclusively in connection with transfer consists of all costs like Stamp duty,Registration Charges, Brokerage etc which are exclusively connected with the Transfer
Yes. You need to deduct 1% TDS on each installment
