Dear sir/Madam,
My mother sold her flat in feb 2019 and deposited 20 lakhs in CGAS in mar 2019 for 2 years. We could not invest it yet , can we extend the CGAS account one more year so that she can buy land and construct before feb 2022 to get tax exemption. Please guide me on this. Thanks
(She has not closed the CGAS account though 2 years is over.)
Capital gain resulting due to sale of residential property has to be used for acquisition of new residential property one year before or two years after the date of transfer of old house to claim exemption under section 54. But if it's used for construction of a new residential house then the timeline is three years from the date of transfer. So you can continue the CGAS account and use the amount for construction. But ensure that construction gets completed within the prescribed time limit of 3 years. Else the balance lying in the account will attract tax in the relevant assessment year.
CAclubindia
