Expenses on Transfer of Capital Assets

You are allowed to deduct expenses from sale proceeds from a capital asset, that wholly & directly relate to the sale or transfer of the capital asset. These are the expenses which are necessary for the transfer to take place.

Here are a few examples-

In case of Sale of a House Property, these expenses are deductible from the total sale price.

  • Brokerage or commission paid for securing a purchaser
  • Cost of stamp papers
  • Travelling expenses in connection with transfer – these may be incurred after the transfer has been affected
  • Where property has been inherited, expenditure incurred with respect to procedures associated with the will and inheritance, obtaining succession certificate, costs of executor, may also be allowed in some cases.

In case of sale of shares, you may be allowed to deduct these expenses

  • broker’s commission related to the shares sold
  • STT or Securities Transaction Tax is not allowed as a deductible expense.

Where jewellery is sold, and a broker’s services were involved in securing a buyer, the cost of these services can be deducted.

Do remember that expenses that you deduct from the sale price of assets for calculating capital gains are not allowed as deduction under any other head of Income Tax, these can be claimed only once.

Should you need our help in computing your capital gains tax, reach out to us cleartax.in and we would be happy to assist you!

 

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