I have CG of 35 L from the sale of flat for 60L in 2020 which was of purchased for 8L during 2001.
Will these assumptions by me are Legal
- I know that I have to open CGAS before June 2021.
2. I have spent 2.5 Lakhs for building plan approval. I need to pay about 7.5 Lakhs for purchase of construction materials. I think I has to keep only 35 – 10 = 25 L by the end of June 2020 in CGAS , Account-A.
3, I have to include the details of CG and the opening of CGAS in the ITR filing during June2021
4. After June 2021 I can with draw from CGAS multiple times and pay directly to the supplier of raw materials and keep bills/receipts for verification by AO. I any amount un-utilized amount has to be deposited back to CG account.
5, Do I need to mention the status of house construction in next ITR of June 2022, June23, until the construction completion.
Please Go through each point and correct if any thing is not in order.
Thanks in Advance
Your understanding is correct.
Note that the interest amount payable on CGAS scheme is a taxable income and needs to be shown as ‘income from other sources’ in ITR.
- 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.
Suggest you to also consult a CA in this regard.
Thanks for the prompt reply.
please bear with me. I wanted brief answer to point 4 and 5 stated above