How to report Capital Gain account closure and balance money use in Income Tax Return

When reporting the closure of your Capital Gains Savings account and the use of funds in your Income Tax Return (ITR) for AY 2024-25, consider the following:

 Reporting Capital Gains Account Closure -

*Capital Gains Account Scheme*: If you had deposited capital gains in a Capital Gains Account Scheme to claim exemption under sections 54, 54B, 54D, 54EC, or 54F, and failed to utilize the amount within the specified timeframe, the unutilized amount would be taxable. - 

*Taxation of Unutilized Amount*: The unutilized amount would be taxable in the year the exemption period expires. In your case, since the 2-year period has expired, the amount would be taxable in AY 2024-25. Reporting in ITR -

 *ITR Form*: Report the capital gains and the tax paid on the unutilized amount in the relevant sections of the ITR form (likely ITR-2 or ITR-3, depending on your income sources).

- *Capital Gains Section*: Disclose the capital gains and the amount deposited in the Capital Gains Account Scheme. Then, report the amount that has become taxable due to non-utilization within the specified period. - 

*Tax Payment*: Since you've already paid 20% advance tax, ensure you report this payment in the tax payment section of the ITR form and claim credit for the same. Key Considerations - 

*Documentation*: Maintain records of the Capital Gains Account Scheme, including the deposit and withdrawal statements, and proof of advance tax payment. - 

*Consult a Tax Professional*: If you're unsure about reporting the capital gains account closure and tax implications, consider consulting a tax professional to ensure accurate reporting and compliance with tax laws .

Dear Mr Rama Chary

Many thanks for your reply.

Regarding the taxation of the unutilised amount, is it in FY24-25 or AY24-25 ?

You have written AY24-25, and the time period expired in Sept 2024 and I could close the Capital Gains Savings account (with a lots of efforts) in Oct 2024. And paid tax on the unutilised amount as advance tax @ 20% immediately.

Kindly clarify it is AY or FY24-25, when the tax became payable .

Thanks and regards 

Good morning to all

For those, who are looking for a reply to my question starting this thread  :-

After going carefully through ITR-2 Schedule CG, I could find answers to my question.

1. Schedule CG, Section B10a is available for reporting unutilized [whether 100% or less] of LTCG from sale of House/Land in earlier years parked in Capital Gain Account, under Section 54. 
2. Once the details are entered, the ITR-2 form would automatically calculate the tax remains payable after taking into account the advance tax paid in the "PREVIOUS" year.
3. The tax on the LTCG becomes payable in the "PREVIOUS" year [in my case - FY24-25] the Capital gain account is closed due to completion of 2 years time limit after sale of the house/land.
4. This tax is to be paid as Advance Tax. 20%[with Indexation benefit] or 12.5%[without Indexation benefit] would apply as per the year in which the asset was purchased and which year sold. Refer to Income Tax Department page for details.
5. Additional, 4% Cess [for Health/Educationon] of the Tax on the LTCG  would be applicable 

I am not a tax expert or a CA, and would appreciate if someone points out any mistakes in my inputs in 1) - 5) here.

Thanks & rgds

Capital Gains Account Scheme deposits that go unused after the exemption deadline are treated as taxable LTCG.

Under Section 54, purchase must happen within 2 years and construction within 3 years of the original property sale. If any CGAS balance remains unspent when that period expires, the unutilized amount is treated as LONG-TERM CAPITAL GAINS in the year of expiry, not the original year of sale.

How to report in ITR-2:
- Go to Schedule CG under Long-Term Capital Gains
- Cost of acquisition = zero (gain was already exempt at time of sale)
- The unspent CGAS balance = taxable LTCG

Tax rate depends on date of original sale: for property sold after July 23, 2024, the rate is 12.5% without indexation. For property sold before that date, 20% with indexation was available.

If the full CGAS amount was utilized within the deadline, no additional Schedule CG entry is needed.

For context on the full Section 54 and capital gains implications in partnership scenarios, this [partnership firm capital gains guide](https://taxgarden.in/blog/section-45-4-capital-gains-partnership-firm-reconstitution-dissolution-india) has relevant background on how gains are computed and reported.