Last month, I sold a 15-year old property and planning to purchase a residential property next financial year.
Is it mandatory to move the fund to a "Capital Gain Account" before 31st March to get the tax exception?
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Enquiry about Capital Gain Account
Replies (3)
Quick Summary
Capital gain has to be invested in a Capital Gain Account scheme before the due date of filing IT Return to avail deduction u/s 54
Jinu J
Yes you have to deposit your capital gain into capital gain account scheme on or before the due date of ITR I.e. 31st july to avail deduction u/s 54
Yes you have to deposit your capital gain into capital gain account scheme on or before the due date of ITR I.e. 31st july to avail deduction u/s 54
Using the CGAS for a planned purchase next year:
• For a residential property sold last month (15 years held, so LTCG), if you plan to buy a new house in the next FY (within 2 years of the sale), you can claim Sec 54. If the purchase happens after your ITR due date (31 July of next year), deposit the gain (or the amount to be invested) in the Capital Gains Account Scheme before the ITR due date.
• Withdraw from the CGAS when buying (Form C), and use it within 60 days.
• If not used within 2 years (purchase) or 3 years (construction), the unutilised amount is taxed in the year the period expires.
• Alternatively, invest up to Rs 50 lakh in 54EC bonds within 6 months of the sale.
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