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LTCG and Tax implications

04 October 2020

I shall receive LTCG of ₹ 6.5 lacs in the next month on sale of a residential house. I have no intention of investing the LTCG in a new house property.

Please clarify whether I have to pay capital gain tax immediately on receipt of the same or can I pay on or before 31.03.2021. Till such time is there any condition to deposit the amount of LTCG or the entire sale proceeds in a particular account.

Is there any way to avoid LTCG Tax in an approved manner.

Advance thanks for your advice.

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4 Replies

ayusmita (Tax consultant) (5885 Points)
Replied 04 October 2020

You have to show in next assignment year about the LTCG with proper details
yes you can deposit it Bank or if you want can invest it in others things depends upon you

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 04 October 2020

As you have no intention of investing the LTCG in a new house property. So, other options is you can save tax by investing Capital Gain in Notified capital Gain Bond u/s 54EC within a Six months from date of trasfer of property.

If you don't want to take any benifit (invest in bond, house ) than you have to pay tax on Capital Gain. Liability to pay tax will not arise immediately. You have to consider you Capital Gain in your income tax return of F.Y 2020-21 and pay tax accordingly. (You have to pay advance tax before 31.03.2021 on estimated income, otherwise interest will levied on tax)

As if you don't want to make any investment to take Exemption, than there is no requirement like Deposit in seprate bank account.

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