Capital gains account scheme 1988

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suren (Querist)
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06 June 2019 The assessee sold residential flat in FY 2018-19 which was bought in 2000-2001 for Rs. 1000000/-. Cost of the Flat say Rs. 200000/- Indexed cost is Rs. 560000/-.
Here actual capital gain is Rs. 1000000-Rs. 200000= Rs. 800000/-
Taxable Capital Gain is Rs. 1000000-Rs. 560000= Rs. 440000/-.

Which amount to be invested in Capital Gains Account Scheme 1988 to avail benefit of Section 54? Actual Gain of Rs. 800000/- or Taxable gain of Rs. 440000/-? Or entire sale proceeds of Rs. 1000000/-?

Can assessee voluntarily invest more amount in the scheme than the capital gain? i.e. If he invests entire sale proceeds of Rs. 1000000/- as the cost of new flat will be much higher than the sale proceeds, is it allowed?

Please guide explaining meaning of 'Capital Gain' as mentioned in CGAS Scheme 1988.

Thanks and best regards.

Amol S Joglekar

Amol S Joglekar (Expert)
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06 June 2019 The amount which the assessee wants to invest in new asset but could not invest before the due date of filing of return should be invested in capital gain account scheme

suren

suren (Querist)
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06 June 2019 Thanks but can you clarify which capital gain is required to be invested under the scheme-actual gain or taxable gain? and what if one wants to invest more in the scheme?

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Amol S Joglekar

Amol S Joglekar (Expert)
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06 June 2019 01. To invest more is truly speaking against the financial management rules.
02. The capital gain which remains un invested till the filing of the income tax rreturn