Turning housing loan interest into cost of acquisition during property sale

With housing loan interest rates remaining reasonable over the years, many taxpayers have turned to loans to fund their residential property purchases. Read this | A guide to capital gains tax on property sales: Navigating pre- and post-2001 rules Several tribunal decisions have taken the view that such excess interest, which could not be claimed as a deduction under house property income, may be treated as part of the cost of acquisition when calculating capital gains on the sale of the property. In one instance, a tribunal even held that interest already claimed as a deduction under house property income could again be considered as part of the cost of acquisition for capital gains. However, it indirectly supports the position that housing loan interest not claimed as a deduction elsewhere may still qualify as part of the cost of acquisition when computing capital gains. Read this | TDS loophole closed: Budget brings in stricter rules for property transactions A recent decision by the Mumbai Tribunal confirmed that interest not claimed as a deduction under house property income can be included as part of the cost of acquisition.