Long term capital gain on house property

kiran jhamnani (Finance Professional) (119 Points)

23 December 2016  
My Brother sold a house on 21st Jan-2014, His CA calculated an amount Rs 16 Lakh 54 Thousand being the capital gain and asked him to deposit into the saving account. This amount is in the Capital Gain saving account. (Not in the Bonds) Now the three years period is going to finished on 21st jan-2017 and unfortunately he was not able to purchase suitable home. This capital gain account accumulated 4% interest and He paid the 10% TDS on interest earned in this account in his yearly IT return. Can he use the same capital account saving money to purchase the house beyond the 3 years passed (form C) and without paying the 20% capital gain tax? He does not want to close the account. Or Income tax office can provide 6 months time with some penalty and no capital gain tax to buy the house. or If at all tax is needed to pay, can he use the Interest accumulated in the capital gain saving account and balance he can pay the tax. Or 20% tax calculation will be based on entire 16.5 Lakhs + Taxes and when he could apply for this procedure .