Capital gain tax

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kiran jhamnani (Querist)
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22 December 2016 My Brother sold a house on 21st Jan-2014, His CA calculated an amount Rs 16 Lakh 54 Thousand being the capital gain and asked him to deposit into the saving account. This amount is in the Capital Gain Saving account. Now the three years period is going to finished and unfortunately he was not able to purchase suitable property. This capital gain account accumulated 4% interest and He paid the 10% TDS on interest earned in this account in his yearly IT return. 1) Now when He should proceed to cancel this capital Gain Saving account & pay tax, get the tax paid clean amount back 3) IT department will allow us to use this interest to pay tax. Interest accumulated is around 1.5 Lakh and tax would be about 3.25 Lakhs. Can we get the entire capital gain tax deducted from the money in the Saving account and balance would be allowed to transfer in the other saving account. This procedure should be done at the time of filing return in the coming financial year return i.e. by 30-July 17 or Just before the date of 3 years finished by 20 January 2017 How long the IT office procedure is, and if there is any chance we meet personally with concerned officer in IT department and beg for 3 month extension to buy the new house through the discretely powers.

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Riddhi Kadhiwala

Riddhi Kadhiwala (Expert)
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22 December 2016 Your Brother can withdraw amount from capital gain tax at any time & pay Capital Gain tax along with interest.
But looking to your case, 3 years are going to complete so dont take this step. Your Brother can use this money anywehere after 3 years completion. That even without tax payment.Your Brother can buy home after 3 years also without application to income tax officer. So question of discretionary power to any officer in Income tax Law to extend time limit of 3 years not apply at all.

kiran jhamnani

kiran jhamnani (Querist)
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22 December 2016 Dear Ridhhi Kadhiwal
Thank you so much for your time and replying. The answer seems less clear to me. 1) My brother can buy using this capital gain saving account i.e. without form C ?
2) No need to close the account we can buy the property soon after but the tax levied in the Financial Year 2014-2015 (Capital gain Tax) when and how this should be paid without any problem with IT rules.

Riddhi Kadhiwala

Riddhi Kadhiwala (Expert)
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22 December 2016 Ok.. Let me make it simple.
1. For Withdrawal of amount from bank, u have to submit form C to bank. Not to Income tax Department..
2. If your brother close capital gain scheme account before expiry of 3 years or withdraw some amount for any purpose(except Purchase of House) before expiry of 3 years then Capital Gain tax will be applied on amount so withdrawn. You have to pay tax in the year in of withdrawal.
After expiry of 3 years, you can withdraw or close account. No need to pay tax in it if withdraw after 3 years

kiran jhamnani

kiran jhamnani (Querist)
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22 December 2016 As per my knowledge and our CA says the tax exemption is for Capital Gain Bonds, not for Capital gain Saving accounts. if the Tax was due in the FY year of sale of house?

Riddhi Kadhiwala

Riddhi Kadhiwala (Expert)
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13 January 2017 yea. tax exemption is for bond. not account

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