CAPITLA GAIN SCHEME WITHDRAWAL

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A client claimed an exemption under Section 54 for capital gains by depositing funds into a scheme in FY 16-17. As the money was not used to purchase or construct a new property within three years, they now wish to withdraw it. The tax is payable in the financial year of withdrawal (FY 22-23), and the previously calculated capital gains remain the same, with no need to update indexation.

Khushbu

Khushbu (Querist)
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13 April 2022 RESPECTED SIR,

MY CLIENT HAS SALE PROPERY IN FY 16-17 AND CLAIM EXEMPTION U/S 54 OF RS.4,38,584 BY DEPOSITING AMOUNT IN CAPITAL GAIN SCHEME. NOW 3 YEARS EXPIRED AND MY CLIENT COULD NOT UTILISE SUCH MONEY IN PURCHASE OR CONSTRUCT OF NEW PROPERTY.
NOW HE IS GOING TO WITHDRAW SUCH AMOUNT BUT BANK NEED NOC FROM AO. AO ASKED TO PAY 20% TAX ON GAIN. SUCH WITHDRAWAL SHALL TAKE PLACE IN FY 22-23.

MY QUESTION IS THAT:
1. FOR WHICH YEAR MY CLIENT HAVE TO PAY TAX??
2. AFTER SUCH HOW TO SHOW SUCH INCOME IN RETURN OF INCOME?? (DUE TO INDEXATION VARIATION)

KINDLY PROVIDE ME ANSWER AS SOON AS POSSIBLE.