29 April 2011
I have deposited my LTG from sale of a flat in SBI with the intention of constructing a house in a plot I own in Hyderabad. Due to Telengana agitation last three years I could not start the construction. Now three years are over. I have already paid tax on the LTCG amount this year as advance tax. The Bank says I have to get approval of the IT officer on Form G. Some IT officer I consulted said that it is not required as it is optional. My CA says he is not aware of any such form and IT has discontinued any certificates to be issued by IT. He advised me that I simply pay the LTCG tax as per the rules on the unused amount as capital gains tax. What is the correct position? Can the bank close my account or shoudl I get Assessing Officer's permisson which I am told is a cumbersum process. T. V. Rao
29 April 2011
Bank's advise is correct. You have to fill up Form G and it should be presented to your ITO for his / her counter signature in the said form itself. The ITO will ask you the details of payment of income tax since the new building is not constructed with in the permitted time. If he / she is satisfied that tax on capital gain is fully discharged by you, he/she will sign the said form and give it to you for onward submission to the bank along with the pass book for withdrawing the money deposited in capital gains account scheme,1988.
12 May 2011
Thanks Mr. warrier. Does it mean that I forego the interest until the ITO approves. Wehn I have declared the capital gains in my returns in the year I sold and have already paid the advance tax this year why is this needed? Is it not an additional burden both to the tax payer, to the bank and the ITO? My CA also says please quote the rule from the finance department.
CAclubindia
