cost of acquisition for non-depreciable assets.

[MONIK DEDHIA]

Dear Experts,

I have purchased land as on 5/5/2007 (date of registration of agreement)  worth Rs.45,00,000/- and the date of payment is 6/6/2007. Land was purchased on Borrowed Money (Interest on same was totally = 2,85,000 appx.) and Brokerage and commission paid @ 15% on agmt value.

Finally land was sold as on 15/5/2010 for Rs.85,00,000/-.

My quarry is : 1. whether it is short term asset or long term asset (i.e. which date to be taken into consideration wheather date of agmt. or date of registratoin or date of payment.)

2. wheather interest paid on unsecured loan will form part of cost of acquisition or not.

3. Whether Brokerage paid at the time of purchase @ 15% is allowable or there is some limit on allowability of Brokerage and Commission.

Regards,

Monik Dedhia.

AI Summary

Tax Implications of Selling Land: Classification as Short-term or Long-term and Cost Deductions Under Review An individual inquired about the tax implications of selling land purchased in 2007 for Rs. 45,00,000 and sold in 2010 for Rs. 85,00,000. The questions raised included whether the asset should be classified as short-term or long-term, considering the dates of agreement, registration, or payment. Additionally, the individual sought clarity on whether interest paid on a loan used for the purchase and brokerage fees at 15% of the agreement value could be included in the cost of acquisition. A respondent asked if the individual had received clarification on the issue.