Tds on capital gain deposit

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kiran jhamnani

Finance Professional

119 Points Joined September 2013

Year 2014- January my bother sold a residentail house and first time submitted the ITR

as per his CA suggested he has deposited 16 Lakhs in Capital gain account before filing the ITR for financial year 2013

i.e. 28-July 14)

from july 2014 this amount is in the bank in Capital gain account (Saving type) some interest accumulated on it. but due to this interest is saving account the TDS is not deducted.

In order to earn more interest on this CG deposit he wish to put the same amount in Capital gain Fixed depost account.

But how bank will calculate the TDS

i.e. the interst accumulated in Capital Gain FD + other FD in same bank

Interest earned in Capital gain saving account + Capital gain FD interest + other fixed deposits interest

Totally all kind of interest in one financial year and accoringly the TDS will be paid or Saving account TDS will not be taken for calculation.

Please advise

Replies (2)

Arun Kumar

Deputy Manager Assurance

230 Points Joined October 2008

Interest is deductible for the entire amount payable by the Bank. For Interest income from savings account you can claim deduction u/s 80TTA but since it is a Capital gain deposit you cannot claim deduction. So the entire income is taxable

Z

Tax Consultation (US and India)

2970 Points Joined September 2011

Capital gain Account scheme offers 2 types of Account

Deposit Account A (In nature of saving deposits, Rule 4 of the scheme)

Deposit Account B (In nature of term deposits, Rule 4 of the scheme)

For Account A, the modus operandi is concurrent to saving bank account only. I think interest from Deposit A category should be eligible for deduction u/s 80TTA, although it should not be allowed for Deposit Account B (Term Deposits)

Secondly, for interest on Account B [FD]

I found the following text on https://www.bankofindia.co.in/english/CapitalGain1.aspx

Interest Exemption under I. T. Act 1961

Interest is not exempted under Income Tax Act, 1961.TDS will be deducted at applicable rates on TDRs.

For computing deduction of tax at source the interest income is aggregated [branchwise]

But tax is not deducted from the interest of saving account.