Capital Gain A/c- Withdrawal for other purposes

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Dhruv

student

25 Points Posted on 05 February 2018

Hi,

One of my clients withdrew money deposited in Capital Gains accounts for purchase of agriculture land after filing form-C as per the CGA scheme but later on utilised it for other purposes and didn't depoist the same back on time i.e. 60 days. I want to know when will it be taxed:

1.In the AY of withdrawal or
2. In the AY in which 2 years from the transfer of the original asset expire?

Replies (5)

Prajjwal Kaushik

Finance Professional

3333 Points Posted on 05 February 2018

In this case, you will be required to file Form - D to the concerned Assessing Officer.

As far as, the main question is concerned - Yes, It will be taxable in the year of its withdrawal.

Dhruv

student

25 Points Posted on 05 February 2018

Hey Prajjwal thanks for your reply! I just wanted to know where exactly in the law is it written that it will be taxed in the year of withdrawal since the legal text simply states that the amount not utilised for purchasing the new asset within the period of 2/3 years will be taxable in the year in which 2 years from the date of transfer of original asset expires. I could not find any mention of the provision in case of withdrawal for other than specified purpose. Please let me know in case you have any idea!