Doubts on Capital Gains Account Scheme / FD (CGAS)

Anybody here have experience of opened, used or closed This type of account?

Need to park the Property sale amount for few months till purchasing Residencial Property...

Have few doubts,

👉 Need to Deposit directly to that CGAS account or Can be deposited 1st in regular savings account then transferred to CGAS Account?

👉 Deposit time frame? Need to deposit before Financial Year End or Before Tax Filling in CGAS Account?

👉 Does the capital gain account or CGAS FD will have any Lock-in period?

👉 The FD interest rates are same as Regular Fd rates or different??

👉 Any Amount withdrawal problems from capital gain account? Does it need Permission form Accessing Officers(AO)?

👉 It says we need to Get permission from the Accessing Officers(AO) for closing the account, for what else we need to get permissions?

Is it easy to get permissions from AO?

👉 CGAS account should be maintained under same person, i mean amount should be deposited under same person account and the purchased under same person? Or can be purchased under other family members name?

Thanks Any experienced users share your thoughts...

To address your doubts on the Capital Gains Account Scheme (CGAS), I'll provide you with the necessary information.

Depositing Funds You can deposit funds directly into the CGAS account or first deposit them into a regular savings account and then transfer them to the CGAS account.¹

However, it's essential to ensure that the funds are deposited into the CGAS account before the due date of filing your income tax return for the financial year in which the capital gains arise [5).

Deposit Time Frame You need to deposit the funds before the due date of filing your income tax return for the financial year in which the capital gains arise.

This is typically before the financial year-end. Lock-in Period There is no specific lock-in period for CGAS accounts.

xHowever, the funds deposited in a CGAS account must be utilized for the specified purpose (e.g., purchasing a residential property) within a specified time frame (typically two years for purchasing and three years for constructing a residential property).

If funds are not utilized within this time frame, they will be treated as capital gains in the year in which the time limit expires.

Interest Rates The interest rates for CGAS accounts are similar to those for regular fixed deposits (FDs).

However, the interest income earned on CGAS deposits is taxable. Withdrawal Withdrawals from a CGAS account can only be made for the specified purpose (e.g., purchasing a residential property).

You may need to obtain permission from the Assessing Officer (AO) for withdrawals.

Additionally, you'll need to get permission from the AO for closing the account. Account Maintenance The CGAS account should be maintained under the same person's name, and the amount should be deposited and utilized by the same person.

However, it's possible to purchase a residential property in the name of other family members, but this may have tax implications.

Additional Tips - Ensure you deposit the funds into the CGAS account before the due date of filing your income tax return. -

Keep track of the interest income earned on your CGAS deposits, as it's taxable.