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Saurabh Chaudhary   17 September 2021

Tax on unutilized LTCG from property

For the capital gain generated through sale.of plot in Aug2018, long term capital gain account was opened with a nationalized bank and exemption was sought under section 54 for purchasing or constructing another a new house. But due to covid the amount remained unutilized and 3 years of exemption got over in Aug 2021. My query is that the unutilized gain will be treated as income for FY 21-22 or for the FY 18-19, since it was generated at that time and do we.need to pay interest as well on the income tax incase it is treated as income from FY18-19. Or do we just need to pay LTCG tax of 20 percent considering it as income in FY 21-22.


 3 Replies

Dhirajlal Rambhia

Dhirajlal Rambhia (SEO Sai Gr. Hosp.)     17 September 2021

The LTCG and the interest for the current year is income for the FY 2021-22; & accordingly assessed in the AY 2022-23. But get certificate from jurisdiction ITO for withdrawal of funds from the CGSS acct.

Saurabh Chaudhary

Saurabh Chaudhary   17 September 2021

Thanks for the reply. But if it will be treated as income for FY 21-22, then why do we need to pay interest on it? We will be paying advance tax right now and will be closing the LTCG account after taking due permission from AO. and the tax paid will be filed in ITR for AY 22-23? 

Dhirajlal Rambhia

Dhirajlal Rambhia (SEO Sai Gr. Hosp.)     17 September 2021

By interest, what I mean is interest accrued in the CGSS account, and not the interest over the capital gain (for 3 years)! !!!

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