Hi Everyone,
I need some clarification regarding the tax rate applicable to the unutilized amount in my capital gains account under Section 54F, following the closure of the account after the Budget 2024 changes. Below is a brief summary of my situation:
- In May 2022, I sold a long-term asset and realized some capital gains.
- In July 2023, I deposited the capital gains amount into a capital gains account.
- As I was unable to purchase a property within the stipulated 2-year period and do not intend to construct a house, I closed the capital gains account on July 30, 2024.
Section 54F states that the unutilized amount in the capital gains account will be taxed as income of the previous year. Given that the LTCG rate effective from July 2023 is 12.5%, should I pay capital gains tax at 12.5%, or should it be calculated at 20% with indexation?
Thank you for your assistance.
CAclubindia
