Good evening
We are planning to sell a plot bought in 2007. We are not interested in buying anohter property.
Ís there any option to save our capital gains ?
Thanks for your advice.
Narasimhan
1 Answers
Dear Narasimhan,
How to Save Long Term Capital Gains Tax without buying another House Property?
If you are unable/dont want to invest the sale proceeds in options under Sec 54, before the date of income tax returns filing , you can deposit the CAPITAL GAINS (not entire sale proceeds) amount in a public sector bank or other banks as per the Capital Gains Account Scheme- CGAS, 1988.
- The capital gain (full amount or utilized amount) can be deposited in CGAS account.
- This is only a stop-gap arrangement, as the funds have to be used to buy or build a house within the period specified.
- The deposited money can be used only to buy or construct a residential house within the prescribed time frame.
- If you withdraw funds from this account, they have to be used within 60 days.
- If you do not utilize the amount within three years of the sale of the first property, such un-utilized amount will be treated as LTCG this will lead to taxation of the unutilized amount as long-term capital gain after three years of the sale of the first / original property.
- The interest rates paid on these accounts are the same as those on regular savings and term deposits. Kindly note that interest earned on this account is taxable.
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