54F, CGAS and equities

Save Share

This query is : Resolved

Quick Summary

This discussion addresses a common query regarding Section 54F of the Income Tax Act and the Capital Gains Account Scheme (CGAS). The user deposited Rs 30 lakhs from the sale of equities into CGAS for a house purchase but couldn't utilise the full amount within three years. They are seeking clarification on the correct tax treatment, aiming to pay tax at 10% on the actual capital gain of Rs 8 lakhs, rather than the 20% applied to the unutilised amount. Advice suggests raising a grievance with the income tax department due to the unique nature of the case.

VISWANATH SURESH

VISWANATH SURESH (Querist)
Follow

28 October 2023 I had sold shares and mutual funds worth 30 Lakhs 3 years back and the amount was deposited under 54F in CGAS scheme for purchasing the house as mentioned below.

>> Sale value of shares/equities: 30 Lakhs
>> Principal = 22 Lakhs
>> Capital Gain amount = 8 Lakhs
>> Amount deposited in Capital gain account t= 30 Lakhs

I am unable to use the complete amount deposited in capital deposit gain account even after 3 years.
According to me, now I need to pay tax at 10% of 8 Lakhs (Correct me, if I am wrong).
I was trying to declare the above in deemed capital gain section with entries as mentioned below
>> Section under which deduction claimed in that year = 54F
>> Amount utilised out of Capital Gains account = 0
>> Amount not used for new asset or remained unutilized in Capital gains account = 30 Lakhs
For above entries 20% of 30 Lakhs is considered as tax.

What is the correct way to declare the above in ITR so that the tax is 10% of 8 Lakhs.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

28 October 2023 Declare 8 lacs insted of 30 lacs.

VISWANATH SURESH

VISWANATH SURESH (Querist)
Follow

28 October 2023 Anything declared under deemed capital gain section is charged at 20% tax.
How this can be handled?
ITR doesn't provide 10% taxation option under deemed capital gain section?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

29 October 2023 Raise grivance in the income tax portal. Yours is a rare case.
Wait for modification in ITR form.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now