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Property sales proceed in fd?

Dheeraj (un) (35 Points)

13 June 2013

Hello all, I am in process of selling the house .i have recd say x amount of money as agreement intial payment on 6th june which I opened an fd in my wifes name , second holder myself for 6 mnths balance payment of y would be recieved on june end at the time of final documents my question is if the entire amount is parked in fixed deposit in my wife name and me as second holder what will be tax implications since she is housewife with no income in short can I park funds in fd before finally parking it in cgas account in the event I am not able to buy house within one year thanx dheerpat

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10 Replies

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 13 June 2013

Yes you can temporarily park your funds in FD's. however eth inerest received on this would be taxable in your hands itself and not your wife's hand.

However if you are not able to invest the CG on or before the due date of filing your return, then you are mandatorily required to deposit them in the CGAS to claim exemption for that A.Y. else the whole of the Cg would become taxable.

so you cant park the funds in FD.

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Dheeraj (un) (35 Points)
Replied 14 June 2013

thanksgiri,

so how do i show it in my tax return under which head..

also can u clarify further the deadline for parking in CGAS..will it be july 2014 or july 2015

the house was purchased by my father back in 1986, but the final documents were done in 1998

for indexation which is to be considered 86 or 98...purachse price 78000 sale price 25 lacs...so my tax payable will be how much

dheeraj

Ritika Pundir (CA) (154 Points)
Replied 14 June 2013

You have to invest the consideration in CGS before the due date of filling of your return of income. If you have sold it in June 2013 and you have not been able to purchase/construct a house property to avail exemption on capital gain then you have to invest the sale proceeds equivalent to the amount of capital gains computed in CGS on or before 31st July, 2014

Dheeraj (un) (35 Points)
Replied 14 June 2013

Thank Yu...how about capital gain amount

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 14 June 2013

Its not the sale proceeds that need to be invested, but it is the Capital Gains that needs to be invested in the CAGS fi claiming exemption u/s 54. So the amount to be invested shud be Sale consideration minus Indexed Cost of acquisition on or before 31st jul14 and exemption can be claimed for that eyar

this CG amount needs to be invested in a residential property within 2 years from the date of sale if it is to be purchased or within 3 eyars if invested in under construction property. If the amounts still remains uninvested within the specified period then the uninvested amt will be taxable after the expiry of the said period of 2yrs or 3yrs as the case maybe.

If exemption is to be claimed u/s 54f then the net consideration need to be invested.

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(Guest)

Cost of Year 1986, when the house was purchased by your father, shall be the year of which cost will be considered for the purpose of computation of capital gain.

Moreover the indexation of the year 1986 is relevant value.

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Dheeraj (un) (35 Points)
Replied 15 June 2013

Hi Ashish not clear on relevant value concept...as I said the official sale deed or dastavej was made in my name in 1998 so indexation will not apply for that year?