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Money from property sale not kept in cga but in normal fd

Girish (Others) (37 Points)

27 August 2015

Hi,

I sold propery in Feb2015 and have parked money in regular FD. Now in August i am have identified another property and planning for registration in September.

Do i need to keep money in Capital Gain account and use it to prove that i have reinvested the money? or its fine just pay off from regular FD?

Thanks

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11 Replies

CA SACHIN (practice) (115 Points)
Replied 27 August 2015

You have to reinvest the amount

CMA Poornima Madhava (CMA) (13097 Points)
Replied 27 August 2015

If reinvestment is not done before due date for filing of income tax return, then proceeds to be invested in capital gain deposit scheme. No exemption can be claimed by opening regular FD account.

1 Like

Kiran. S (CTO) (745 Points)
Replied 27 August 2015

Interest on FD is taxable is understood without saying.

You can purchase a new property within two years of selling the old house. In these two years you should open a savings account with capital gain. In this saving account you should open three /four Fd and as and when new house [under construction ] or ready possesion flat money requirement is there liquidate the FDs.

Girish (Others) (37 Points)
Replied 28 August 2015

Thanks All,

@ Poornima,

You mentioned that if reinvestment is not done within filing of income tax returns within due date. is it for ITR1?. ....I sold in Feb2015..and buying new one in Sep15. I will be openeing CGA soon ...Do i need to mention anything in ITR1? i think no coz i don't see any relavent field for it...or may be ITR4 has it (which has due date Sep end)

@ Kiran,

Yes, I did not recevie any interest within March2015. so i have to declare and pay tax for next year i guess.

Kiran. S (CTO) (745 Points)
Replied 28 August 2015

Certainly it will be taken in AY 2016-17.

Remember you must file IT return even though you are below taxable income bcoz AIR in 26AS will reflect the Sale of property above 30 Lkahs.

You may get a query regarding selling of the property. at that time reply to that query stating you have purchased a new house.

This will help for

a) TDS that you are going to deduct and pay with Builder's/Owner's PAN number in AY 2016-17.

b) Capital gains which will be exempted for purchasing new house within 2 years.

Girish (Others) (37 Points)
Replied 28 August 2015

Cool. Thats informative.

If i get query , i assume it would be a letter...how would i reply back ? and to whom? is it online?...is it ITRx?

Kiran. S (CTO) (745 Points)
Replied 28 August 2015

You have to reply to AO of your ward. Bcoz Query will be from AO.

In AY2015-16 return you must fill the sheet "Income from House property" with old house address

In AY2016-17 return you must fill the sheet "Income from House property" with new House address.

Girish (Others) (37 Points)
Replied 28 August 2015

Oops!

So then idealy i am suppose to declare under "Income from House Property" for AY2015-16. but i am yet to keep money in CGA...

Is it fine to just mention now...and keep money in CGA after Augst 31st? and delcare the buy of new house in AY16-17 since i am buying new one in Sep? :-)

CMA Poornima Madhava (CMA) (13097 Points)
Replied 28 August 2015

The due date for filing return this year in your case (assuming no business income and no tax audit) is 31st August. So you will have to open CG deposit account before 31st August in order to claim exemption u/s 54. Use ITR2 to mention the details of deposit under Schedule-CG.

Girish (Others) (37 Points)
Replied 28 August 2015

Thanks Poornima for the details.

I don't see ITR2 dropdown on website.

I can open the account before 31st...but not deposit all the money before 31st. :( When is the last day to submit ITR2?

CMA Poornima Madhava (CMA) (13097 Points)
Replied 28 August 2015

Download ITR2: https://incometaxindiaefiling.gov.in/

Just opening the account is not enough, you will have to deposit the money in such account before due date of furnishing ITR. Due date for ITR2 is 31st August, this year.