Capital gain saving account

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Jignesh (Querist)
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25 July 2012 Hello Friends,

My client had sold a residential property in March 2010 and Long Term capital gain arising from the same was Rs.14,00,000/- which he deposited in to CGSA with Nationalised Bank on 31/07/2010.

Now, it has been almost 2 years and my client is unable to find appropriate property of his choice and budget till now.

My question is what are the options available to him so that no Capital gain tax would be levied on him.

1. Can the amount be withdrawn and invested in Capital Gains Bonds now?

2. Is there any possibility of extension available to him for additional tenure in Capital Gains Saving Account?

Awaiting an appropriate solution.

Thanking you all in anticipation.

shakti soni

shakti soni (Expert)
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26 July 2012 Hi Jignesh,

Your client(Individual) has correctly transfer the amount to CGSA.

Now sec 54 speak as follows
1.Assessee should purchase a house property 1year before or within two years from the DATE OF TRANSFER
2.or has constructed the a residential house property within a period of three years after the DATE OF TRANSFER.

Sec 54EC-
Assessee should invest in a specified bond within 6 mths from the date of transfer of the asset.

There fore time to invest in bond is already gone......you cannot utilise this benefit.

Now only hope for saving CG Tax is "Construct the residential house property within MARCH 2013".
Note: Construction should be completed before the said date.

Hope your query is cleared, other wise please consult a tax consultant.

Rgds
Shakti Soni