Capital Gain Tax investments

House Property sold on 29.03.2021 (Sale Deed Registration) for Rs. 1 crore.   Value of the property after indexation is Rs. 60 lakhs.   Hence Capital Gain is Rs.40 lakhs.

Questions:

When should Capital Gain account is to be opened in a Bank?   Immediately?

How much amount should be in Capital Gain Account ?

Whether the Balance Amount (other than Capital Gain) can be invested in Shares, Mutual Fund etc?

For purchasing the New Propertywhether the amount from Capital Gain account can be used?

Whether Resale  - House Property can be purchased to avoid capital Gain ?

In which instruments investment is possible to avoid capital Gain Tax ?

 

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Replies (2)
Quick Summary
This discussion clarifies Capital Gains Tax on a property sale, calculating a gain of ₹40 lakhs. It explains that the Capital Gains account must be opened before filing your Income Tax Return (ITR) for the relevant financial year. The full gain amount can be deposited, and any balance can be invested in shares or mutual funds. Crucially, funds from this account can be used to purchase a new property, including a resale property, to avail tax exemptions. Other investment options like 54EC bonds are also mentioned.

Required to deposit the un-utilised capital gain in the capital gains account scheme before furnishing return of income but not beyond the due date for furnishing return of income.

Yes, For purchasing the New Property the amount from Capital Gain account can be used.

 

 

1) Due date to open CG deposit account is before filing of ITR for FY20-21 2) CG deposit can be up to the amount of capital gain (₹40 lacs) 3) Yes, balance can be invested in other available options 4) Yes, CG deposit can be utilized for purchase of new house 5) Yes, even used house can be purchased to avail exemption 6) 54EC can be the other investment option

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