capital gain account

vignesh 946
Viewed 2015

Hi we have sold one property for 20L. and i consulted one auditor for this also. I have two options either to buy a house in two years / construct one in three years . Till that time the money can be deposited in the Capital gain savings account/desposit. or I need to invest in 54 EC bonds which has 3 yr lock in. My doubts

  1. we sold it on aug 05. He told till jan 5 i can enjoy by putting that to short term Fd and after six months if i dont have the idea of investing in property i can put that money in 54 EC bonds or if i have the plan of buying the house i can deposit in the capital gain savings account but within 3 yrs jan 2015 i should have constructed one house. Is this correct or not?

  2. what is the Interest rates on the capital gain savings / deposit account ?

  3. At the end of the tenure in case i am not buyng any proeprty wht will hapen? They deduct tax and give back the amount right? Please guide me and clear my doubts. Regards Vignesh

section-54f capital-gains-account section-54ec long-term-gains
1 Answers

Your auditor has suggested right things to you.

Capital gain bonds u/s 54EC can be bought within six months of sale. So during this period, you can keep money invested anywhere.
If you have made your mind not to invest into residential house property in this six months, you should invest into capital gain bonds before six months end. If you miss this six month period, either you would have to pay taxes or buy/construct a residential house property.

Its not mandatory to deposit capital gain amount into capital gain scheme account if possession of new property is taken (or construction of house is completed) before income tax return filing last date (31st July 2013). But if its not true, you would need to deposit any unused capital gains (or sale consideration in case sold property was not a residential house property) into capital gain scheme account before last date of return filing.

Amount deposited into capital gains scheme account can only be withdrawn in form of payment to builder/selling party/material supplier/contractor/architect etc. Account can be closed with permission from assessing officer only.

Interest rates on the capital gain savings / deposit account: Normal saving bank account interest in case of account 'A' and normal term deposit rates for Account 'B'. Account B is like fixed deposits.

After three years, if you did not bought/constructed any property, you would need to pay taxes on long term gains, get a clearance from assessing officer, close the capital gain account and take your amount back.

Pankaj Batra5212
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