Capital gain under section 54f gain account scheme 1988

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2018 I have sold my Residential Plot in March 2018. I intend to purchase a Residential Flat in other City within 2 years and for that I am ready to invest 30 LAKHS. Net Sale Proceeds from Plot is 20 Lakhs. LTCG comes to Rs. 15 LAKHS. I have planned to invest the Amount in Capital Gain Account . I know that if I invest entire amount of my Net Sales Proceeds of 20 LAKHS in New Flat , I will get full exemption of LTCG Tax on 15 LAKHS @ 20%. I am confused whether I am required to Deposit entire Sale Proceed in Capital Gain Account OR it will be sufficient to deposit only Capital Gain amount of 15 Lakhs. I intend to deposit only 15 LAKHS and while purchasing New Flat , I will invest from my other sources. Kindly clarify.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 July 2018 Net sale consideration has to be invested.

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2018 Thanks for Prompt Guidance Sir. Now, after investing entire Net Sales consideration in Capital Gain Account and after filing Return for AY 2018-19 and getting Exemptions, suppose I change my mind and finally decide not to purchase a New Flat at all and pay Due LTCG Tax before 31-03-2019 i.e in this Financial Year 2018-19 itself. Then how I will proceed to pay LTCG Tax and whether I will be allowed to close the Capital Gain Account and witthdraw entire money deposited,of course, after paying LTCG Tax and taking approval from Assessing Officer. I mean to ask you whether as per Act and Rules Income Tax Authorities are allowed to approve such a Premature Closure of Capital Gain Account OR there are certain other conditions or limitations or minimum waiting time for closure of Account.

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Querist : Anonymous

Querist : Anonymous (Querist)