CAPITAL GAIN ACCOUNTING SCHEME 1988

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This discussion clarifies the tax treatment of funds invested in the Capital Gains Scheme 1988. If you invest in a bank term deposit under this scheme for three years and do not purchase or construct a new residential property, the principal amount will be taxable as Long-Term Capital Gains (LTCG). The interest earned on the deposit is taxable under Income from Other Sources (IFOS). The scheme's primary purpose is to hold the funds until a new property is acquired, rather than providing a complete tax exemption on the investment itself.

raghavendra b

raghavendra b (Querist)

20 May 2020 DEAR SIR,

WE INVESTED CAPITAL GAIN AMOUNT IN THE CAPITAL GAIN SCHEME IN THE BANK TERM DEPOSIT ACCOUNT FIXED ABOUT THREE YEARS. IF WE ARE NOT ABLE TO PURCHASE OR CONSTRUCT NEW RESIDENTIAL HOUSE PROPERTY THE WHOLE FIXED AMOUNT AFTER EXPIRY OF THREE YEARS WILL BE TAXABLE OR ONLY THE YEAR OF INVESTMENT EXEMPTED FROM INCOME TAX.
OR CAPITAL GAIN SCHEME IS COMPLETELY EXEMPT FROM INCOME TAX.

PLEASE CLARIFY ME

REGARDS

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

20 May 2020 The principal portion of the FD is taxable under the head LTCG and the interest is taxable under the head
IFOS.

raghavendra b

raghavendra b (Querist)

21 May 2020 THANK YOU SIR,

SO CAPITAL GAIN SCHEME ACCOUNT IS ONLY TO KEEP THE AMOUNT UNTIL PURCHASE NEW HOUSE PROPERTY OR CONSTRUCTION. THERE IS NO TAX EXEMPTION ON INVESTMENT IN THE CAPITAL GAIN SCHEME ACCOUNT.

THANKS AND REGARDS

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