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Capital gain account

Ravi (Mgr) (24 Points)

18 April 2012

I sold a flat in Dec 2010 and had deposited the gains (10 lacs) in Capital Gain Account in March 2011. Prior to this I had purchased a flat in an under construction apartment in June 2008 and was paying the installments on my own. Now I have to pay the final installment and other costs like stamp duty, taxes, etc (all put together 6 lacs) before I get the possession.

My first query is that can I withdraw this amount (6 lacs) from the Capital gain account and pay tax for the balance amount. Second query would be if I can use the balance amount against the installments that I have already paid to the builder. Please note that the last installement paid to the builder was in Jan 2010 (before the capital gain thing happened).

Thanks in advance.

Ravi

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Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 18 April 2012

the exemption u/s 54 can be taken only if the house is being purchased one year before or within 2 years after the transfer took place. so in your case you should get the possession on or before Dec13 as for under construction flat the time limit is 3yrs from the date of trasnfer.,

In case the Capital Gains could not utilised on or before the due date of filing the I-T return, then the entire Cg is requried to be deposited under the deposit scheme & the amount can be withdrawn from the account for the puepose of purchasing a new flat within 2 years or for under construction flat within 3 years from teh date of trasnfer.so you can definitely withdraw the amount of 6lacs from the deposit scheme.

any balance remaining to the deposit account, then tax @ 20% wud be requried to paid on the Capital Gains remaining unutilised.