Personal Finance

Your Taxes

Sanjiv Chaudhary | Updated on January 13, 2018 Published on February 19, 2017


I purchased a 2BHK apartment in January 2016 for ₹28.6 lakh and I am planning to sell the same for ₹45 lakh after April 1, 2017 to take advantage of the new cost inflation index for 2017-2018.

Can I add the stamp duty and registration charges to arrive at the actual cost price for calculating capital gains?

This is my second property as I already have one house where I reside.

If I keep it vacant until I am able to sell it, will I be liable to pay any income tax on a presumed rent ? The flat has been vacant since December 2016.

B Chander

As per the provisions of the Income-tax Act, 1961, as proposed to be amended by Budget 2017, house property shall be treated as a long-term capital asset, only when it is held for more than 24 months.

In your case, the property has been purchased in January 2016; thus, the same needs to be held for more than 24 months to qualify as long-term capital asset, else it shall not be eligible for indexation benefit.

Though‘cost of acquisition’, is not defined under the Act, practically speaking, it includes all the expenses which are incurred by the owner in purchasing such capital asset, including stamp duty and the registration charges paid.

If a taxpayer holds more than one self-occupied house property (that is, not letout) during the year, then, any one property (as per taxpayers discretion) is treated as ‘self-occupied’ and its annual value is considered to be nil.

The other house property will be considered as ‘deemed to be let-out’ and a notional rent, as per the provisions of the Act, will be computed as the taxable income under the head ‘Income from House Property’.

Income from deemed to be let-out property will be computed in the same manner as in the case of ‘let-out’ property and deductions as mentioned can be claimed.

In case of let-out property, the annual value of the property shall be the annual rent received or receivable by the owner or the fair rental value, whichever is higher.

In the case of property which has been let out and was vacant for whole or part of the year, and due to such vacancy, the actual rent received or receivable is less than the fair rental value of the property, then the annual value of the property shall be such actual rent received or receivable.

However, this benefit is available only where the property could not be let out and not where you stay in one house and keep the other house vacant.(in which case you should offer to tax the notional rental income in your tax return).

The writer is a practising Chartered Accountant. Send your queries to

The writer is a practising Chartered Accountant. Send your queries to

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Published on February 19, 2017
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