I had opened capital gain account in State Bank of India and deposited the amount that was to be paid for the upcoming flat. At various stages I had withdrawn from this account and paid through Demand draft. Now I want to take the total amount available in this account through Demand draft for payment to the flat building agency. My bank says that I cannot withdraw total amount (zero balance) and I have to take permission from Income tax officer for closing Capital gain account. I asked them is there any minimum limit of amount to be left in capital gain accountwhich can remain in the account without closing it? They have no clear reply or reference to the related clause. Verbally they say that you should keeep at least 5000 to 10000. I have following questions:
1. If I want to pay the total amount availavle in capital gain accountto the builder, have I to close the acount and for that take approval from Income tax officer? If yes can I minumum amount (how much?) and withdraw rest for payment to builder. This I want to do to avoid time consuming process of taking approval form thr IT department. I want to leave say Rs 100 and take rest for payment and then go for closing the account. This would facalitate timely payment to the builder.
2. Why does account get automatically closed when complete amount is paid to the builder through Demand draft?
3. I am told by one of the bank employees that unclosed accounts get converted to saving bank account after 3 years? Is it so? What are the possible questions IT department may ask about non closure of this account if the balance is say Rs. 100/=?
CAclubindia
