Capital gain

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This query is : Resolved

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This discussion addresses whether interest earned on capital gains deposited into a savings account is considered part of the capital gain or income from other sources for tax purposes. The consensus is that the interest is taxable as income from other sources, with potential deductions available under sections 80TTA and 80TTB for savings bank interest.

Rajinder Kapoor

Rajinder Kapoor (Querist)
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15 August 2020 Dear Sir

I incurred long term capital gain by sale of property last week. I have deposited this amount in my existing saving account. Does any interest earned on this amount of capital gain will be treated as part of the capital gain or it will be treated as part of income from other sources for ITR filing purpose. Thanks

Bhavin Shah

Bhavin Shah (Expert)
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15 August 2020 Taxable as interest income under the head Income from other sources Also deduction is available for savings bank interest upto Rs 10000 u/s 80TTA & upto Rs 50000 u/s 80TTB (for sr citizens)

Rajinder Kapoor

Rajinder Kapoor (Querist)
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17 August 2020 Dear Sir,

Thank you very much for your response. I am confused with the answer as another CA in my circle mentioned that interest earned on capital gain deposited in the normal saving account shall also be treated as part of the Capital Gain. Just for reference, can you share income tax section under which this is mentioned. Thanks a lot. Kind Regards

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