Cost of acquisition of house

Sale of house is one of the major tax events for any individual. I have covered the tax implications for the sale of house here

Now, another important thing to consider is the cost of acquisition itself for the house. House is not a commodity for which you pay via your credit card, it's typically done over a period and involves huge sum of money which is mostly coming from home loans. 

Cost of Acquisition (COA) is defined as any capital expense incurred at the time of acquiring the capital asset. Hence, it includes all the expenses incurred to complete the acquistion of the asset. 

Apart from the money paid for the house as agreed with the seller, following can be added to this sum for calculating cost of acquisition of the house while computing capital gains

• Expenses done towards registration and stamp duty can be added to the cost of acquisition of the house
• 1% TDS paid to the government on behalf of seller is definitely part of the cost of acquisition and must not be overlooked 
• Expenses incurred on repairs and renovation can be added to the cost of acquisition of the house 
• The interest paid on the home loan taken for the purchase of this house can also be added to the cost of the house. Refer this link for more info
• Brokerage paid to broker is also one of the expense for the purchase of house and can be added to the cost of acquisition

There could be more expenses associated with the purchase and hence you need to make sure you record and add all of them correctly while arriving at the cost of acquisition of the property.