Capital gain account scheme

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dashrath patel (Querist)
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19 February 2014 Dear sirs,

What happens when taxpayer forget to open capital gain account under Capital Gain Account scheme,1988. Can he claim exemption in such case? Is it compulsory to open CGAS?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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19 February 2014 This scheme is meant for parking the amount required to be invested in the residential house for the time being until you acquire the property.
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If you can not purchase the house within the stipulated time, then only the need of opening a capital gains account arises.
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dashrath patel

dashrath patel (Querist)
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20 February 2014 Dear Bafna sir,
I want to clear my case here:

My uncle sold N.A land of Rs.6 crores as on 27 june,2011.He had neither paid capital gain tax nor filed income tax return u/s139 within due date. He also failed to re- invest money in residential property.and not deposited money in capital Gain account scheme.
Now IT department have sent notice u/s 133(6) requiring to produce the information.
The only way to claim exemption U/s 54F is that he must purchase plot of land and construct a house within 4 months( i.e. 3 years from the date of transfer of property) LAST DATE 27/06/2014.

So as per law the taxpayer shall made deposit before furnishing the return of income or due date of furnishing the return of income u/s139(1) i.e. 31 july,2012 whichever is earlier.

I am still confused

IS IT MANDATORY TO DEPOSIT MONEY IN CGAS SCHEME?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 February 2014 In my view, your uncle can still file the return U/s 139 for the AY 2012-13.
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Though the time limit of depositing the amount has gone away with the due date of filing of return .i.e. 31.07.2012.
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The only option remains with him to sustain
his exemption claim remains -is construction of house property.
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If he purchases a plot right now and invest the consideration for the purpose of construction of house, he still can save himself from the capital gains tax.
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