Respected Colleagues,
For claiming exemption under section 54, should one has to considered interest amount earn on prinicpal deposited in "Capital Gains Deposit Account Scheme" also for making investment??
What would be nature of income earn as interest from Capital Gains Deposit Accountn Scheme??
Dear Pratik
Under CGAS 1988 - Capital Gain Accounts Scheme 1988 is applicable to eligible taxpayers who wish to claim exemption u/s 54 for capital gain .
As per this scheme
1. Interest is not exempted under Income Tax Act, 1961.TDS will be deducted at applicable rates on TDRs.
2. Interest earned from this scheme will be treated as income from other sources.
if the sale proceeds from a land is deposited in a capital gain FD account for 6 months and then yhe principal amount invested in a flat. should the interest acquired also be put into buying the flat after paying the TDS on the interest
No only the funds that result in cg and funds deposited in cgas should be utilised for claiming deduction u/s 54.
The interest earned would be taxable as income from other sources. Also such interest is subjected to TDS. I.e interest earned is 10000 or more, then TDS will be deducted on the same
interest received capital gain a/c and tax paid interest amount so withdrawl interst amount
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