Cost of acquisition - Processing fee and MOD cahrges

Dear Sir,

Yes, you can not add it in COA of property.

As per law, these charges are considered as interest and therefore deduction on the same can be claimed.

"Under the Income Tax Act, Section 2(28a) defines the term interest as 'interest payable in any manner in respect of any money borrowed or debt incurred (including a deposit, claim or other similar right or obligation)'.

Therefore, it is eligible for deduction under Section 24 against income from house property .Other charges also come under this category but penal charges do not. 

No, you can not add processing fee and MOD charges (paid to the bank for loan approval) as cost of acquisition.

No the loan processing charges cannot be taken as cost of acquisition or cost of improvement as neither was it necessary for purchase of property nor it adds to the value of property.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Hello Sir,

No, you can't add bank processing fee and MOD charges (paid to the bank for loan approval) as cost of acquisition.

(*Expenses from sale proceeds from a capital asset, that wholly and directly relate to the sale or transfer of the capital asset are allowed to be deducted. These are the expenses which are necessary for the transfer to take place.)

Hello,

No, bank processing and MOD charges won't be allowed to form cost of acquisition.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Yes, in my opinion you can add these expenses as a part of cost of acquisition.

Not allowed as these expenses are not directly related with the cost of the property.