NRI Tax Alert 🚨
Meals & Travel Costs No Longer Deductible in Property Sales
The Income Tax Appellate Tribunal (ITAT) Bengaluru has clarified that personal expenses like meals and transport cannot be claimed as deductions when calculating Capital Gains.
For many Non-Resident Indians (NRIs), selling property in India often involves international travel, local stays, and administrative costs. However, a landmark ruling (Vijay Lakhmichand Israni vs ITO) has confirmed that these are "personal effects" and do not qualify as expenses for property transfer.
✅ Allowable Expenses
- Brokerage fees
- Stamp duty & Registration
- Legal & Documentation fees
- Permanent structural repairs
❌ Non-Allowable Costs
- International/Local airfare
- Hotel & Meal expenses
- Courier & Shipping charges
- Movable appliances/Furniture
The Legal Basis: Section 48
Under Section 48 of the Income Tax Act, a deduction is only permitted for expenditure incurred "wholly and exclusively" in connection with the transfer of the asset. The Tribunal ruled that while travel may help a sale, it is not intrinsically linked to the transfer of the title itself.
This ruling helps reduce disputes by providing a clear distinction between transfer costs and personal lifestyle expenses. Always maintain proper receipts for structural improvements and legal costs to ensure valid claims.
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