Withdraw interest accrued in cgas type a or b account

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178226 Points)
Replied 29 April 2017

" but keep the LTCG in CGAS Type B (TD) for 3 years and pay tax on the LTCG in the concerned FY. "

You have to utilize the amount parked (which is long term capital gains) for purchase (within two years) or construction of a house property WITHIN THREE YEARS. Any amount not utilized within 3 years of sale of the capital asset is liable for capital gains tax in the year of withdrawal i.e. end of 3 years.

So, you have to offer the amount for taxation and then withdraw whole amount including tax accrued. No amount of capital allowed for withdrawal in between, other than for procurement/construction of house property.

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Kushal Pande (CFO) (256 Points)
Replied 29 April 2017

Thanks a lot for the reply.

Originally posted by : Dhirajlal Rambhia
	" So, you have to offer the amount for taxation and then withdraw whole amount including tax accrued. No amount of capital allowed for withdrawal in between, other than for procurement/construction of house property.

You mean including interest accrued, right?

Say my motive is to defer the tax payment, i.e. pay tax at the end of the 3 years on the whole LTCG parked in CGAS a/c and not buy any house property...

So only on closure of the CGAS a/c, I will get access to the interest accrued? In those 3 years I won't have any access to the interest earned?

I ask because the interest earned is NOT a part of the LTCG.

Also, I've one more question.

Can the tax payable on the 100% unutilized LTCG parked in the CGAS a/c after 3 years be sourced from the CGAS a/c itself, will the AO oblige as the tax payable would a large amount?

Or, one has to source the tax amount from his/her own funds, pay the tax, get Form G from AO and only then the amount in CGAS a/c will be free?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178226 Points)
Replied 29 April 2017

1. Though interest gets accrued, but taxable yearly. Even TDS gets deducted quarterly for the interest accrual.

2. Either pay tax and get permission to withdraw whole amount; or get permission from AO to withdraw partial amount for tax payment!!

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Kushal Pande (CFO) (256 Points)
Replied 29 April 2017

1. All okay. But no accees to interest till closure of a/c, right?

2. Understood. It will all depend on the AO.

Thank you.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178226 Points)
Replied 29 April 2017

1. Yes, withdrawal from CGAS acc, of any single paise is not allowed for any other usage than house property purchase/construction. No difference there between principal or interest!!

2. Generally, department accepts/clears such application without much hitch.

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