Ltcg depost scheme account

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 July 2012 A has utilised part of LTCG arising from transfer of a residential house in buying another house. Can he deposit balance of LTCG in the Capital Gain Deposit Account in a bank and avail total exemption of tax on LTCG during the year?
He may purchase another house of higher value with in next 2 years or construct additional floor on the newly purchased property with in next 3 years and thus utilise the money deposited in CG Deposit scheme account.
Kindly clarify.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

14 July 2012 He can deposit the amount in the capital gains account.
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If he want to claim exemption against the higher valued property, he can do so , by not claiming exemption against the house of the lower cost recently purchased.
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In case of further construction of house, on the said newly purchased house, care must be taken so as to show the entire Housing Project as a single residential unit. This can be managed easily as at the time of filing Return you have to claim exemption in respect of investment in the "New Asset", which is equal to the amount already invested plus the amount deposited in the capital gain account.
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