Capital gain

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swasti (Querist)

03 July 2013 A friend of mine had sold an ancestral property. Right now he is not planning to purchase a new property. Now as per my knowledge he has the following options :
(1) To keep the money in a Capital Gain A/c with bank (2) Invest in Govt. Bonds (REC or National Highway)
I would like to know the following : Is there any lock-in-period for both the options? If the money is kept for full lock-in-period in bank or bonds, then money withdrawn after full term is taxfree or not?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

03 July 2013 A. BANK ACCOUNT:
Money withdrawn even after lock in period from capial gains bank a/c will be taxable in the year of withdrawal.
.
Actually, this facility is to be used when there is an intention of buying a residential house-
WITHIN THE PRESCRIBED TIME LIMIT FOR CONSTRUCTION OR PURCHASE WHICH IS STIPULATED FROM THE DATE OF TRANSFER OF THE CAPITAL ASSET.
.
BONDS: No tax if withdrawn after the lock in period.
.

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swasti

swasti (Querist)

04 July 2013 Thanks a lot Sir. Sir one more thing I would like to know about lock in period in bonds. Is it 3 years or 5 years. Another thing for which I seek your guidance is that if the legal heirs of the ancestral property are more than one (they are 3 brothers & 1 sister), how would be the cost and capital gain derived in hands of each.

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