Amendment in existing provisions

Prevention of double deduction claimed on interest on borrowed capital

• It was observed that some assessees have been claiming deduction for Interest paid on borrowed capital for acquiring, renewing or reconstructing a property as a deduction for computation of income from house property.

• Further the assessees are claiming the deduction again while computing capital gains on transfer of such property by including the interest expense as part of cost of acquisition or cost of improvement of the immovable property.

• Accordingly, in order to prevent the double deduction, it has been proposed that interest on housing loan already claimed as a deduction under other specified provisions shall not be included in cost of acquisition/ improvement for the purpose of capital gains arising on the transfer of such asset.

Clarification on capital gains on consideration received through cheque, draft, etc. in case of JDA

• Under the existing provisions, for computing capital gains arising to an Individual/ HUF from transfer of land or building under a Joint Development Agreement (JDA), sales consideration is taken as circle value of assessee’s share in the property as increased by the consideration received in ‘cash’ – [Section 45(5A)]