Capital gain

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harinder arora (Querist)

15 February 2014 1.A person sold residential house for rs. 75.oo lacs after indexation long term capital gain comes to rs.60.00 lacs he invest rs. 50.00 lacs in bonds.What amount he should invest in new house wheather 25.oo lacs or rs 15.oolacs.
2. what amt. he sould deposit in capital gain a/c.
3.After 3 years from the sale he failed to purchase/construct residential house,are he lible to pay tax to withdraw money from capital gain a/c.
4.Is any tax payable after 3 years on encashment of bonds.
5. What is the procedure to withdraw money from capital gain a/c either premature or after completion of 3 years.

CA Galib Mirza

CA Galib Mirza (Expert)

15 February 2014 1. You have to deposit Rs.10 lacs in new house to claim exemption under section 54F
2.If he don't invest money in Bonds and House he should invest Rs.60 lacs in Capital Gain A/c for 3 years, and prior to expiry of the same he should Purchase/Construct House
3.Yes , he is liable to pay tax in case of Failure of point no.2
4.No, in case not withdrawing any money from the Bonds before maturity,there is not tax on encashment.
5.Dear Friend for withdrawal follow procedure :-

There are two types of accounts which can be opened in a Bank. 1. Account Type A: It is just like Savings Bank account and a pass book will be issued. 2. Account type B: It is like a Term Deposit and Term Deposit receipt will be issued. For withdrawals of funds from CGAS under Account Type – A can be made from time to time by the depositor, subject to specified terms and provisions of the Scheme by submitting the requisite form. Withdrawals under Account Type – B can be made after the expiry of the deposit period only.

Form C should be filled up and submitted to the bank for the initial withdrawal from Account Type – A. For subsequent withdrawal from Account Type – A, form D should be used. Since Account Type – B is a term deposit account, for withdrawal, it will first have to converted in to Account Type – A, by filling Form B and then follow the method of withdrawal as Account Type – A.
The different types forms will be available in the Bank.
Generally you can not withdraw cash. You have to issue cheques to parties like contractor, suppliers of iron, cement etc from your CG Account. The entire amount deposited can be utilised for the purpose of construction. However the amount should be utilized within 3 years from the date of opening of the account.

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harinder arora

harinder arora (Querist)

15 February 2014 Thanks for useful information one thing more if he fail to purchase/construct a house than what is the procedure to encash the TDR of capital gain scheme.

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