11 October 2019
I opened a capital gain account with SBI in 2017. Now I was unable to buy/construct any new flat till date. Now I want to close the account. As per the process, I need the approval of Jurisdictional income tax officer. Can you please let me know what is the process of getting the same? Whom do I need to approach and what all documents do I need to furnish?
12 October 2019
You can discuss the matter with your Jurisdictional Income Tax Officer. My opinion is that since this is either Savings Bank or Fixed Deposit Account in your name, you need not have to take any permission from the Income Tax Officer.
13 October 2019
A no objection certificate is required from the AO. The AO must approve the withdrawal as per the Section 13 of the CGAS, 1988. You may check the details of your jurisdictional AO from https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/KnowYourJurisdictionLink.html. There is no format for the application, so a letter for granting approval shall be enough. The AO may grant you the necessary approval only after being satisfied that the necessary tax on capital gains have been paid. It may be noted that the premature withdrawal or non-utilization of CGAS funds is taxable in the year in which it is so withdrawn or remains unutilized.
13 October 2019
Thanks a lot to Mr. Soumitra & Mr. Darshan Jain for replying to my query. Need one more clarification on this - I'll now pay the necessary tax on CG. Is there are any rule whether AO can instruct the bank to deduct the necessary tax from my total amount in that account and then close? Otherwise, I need to manage fund separately for paying the taxes. Can you please also tell me in the latter case, in which category I'll have to pay the tax on CG through online?
15 October 2019
Well the CGAS is silent on the payment of tax. It merely seeks approval of the AO for withdrawal of funds. Practically, AO doesn't grant approval till the time all due taxes have been paid. I would suggest you fill FORM C for withdrawal of funds in order to pay taxes and then apply for closure. If the withdrawal is not allowed by the bank then ask the AO to instruct the bank to allow withdrawal for payment of tax. In my opinion there is no direct remedy to your problem. It can't be done without the help of AO. Pay advance tax in the year in which the account is closed, apply to the AO for approval and close it. Hope this helps. :)
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