Upgrad LLM

long term capital gains - deposit in ltcg account


Hi,

I sold a residential apartment after 4 years of holding it. The sale happened on 6-April-2010. As per my understanding, this would qualify as Long term capital gains and I can save tax on it by keeping the gains in LTCG account and buying a new residential property within 2 years. I am planning to buy a new property only after April 2011.

Now, my questions are:

1) What is the last date when I can deposit the money in LTCG account so as to save tax? Is it 31-Mar-2011 or 31-July-2011 (Last date for IT return filings)?

2) Do I need to deposit the complete difference between sale price and acquisition price into this account or do I need to deposit only difference between Sale Price and Indexed Cost of acquisition?

Thanks in advance.

 
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B.com

hi,

the reinvestment is to be made within the time allowed for the purpose(i.e. one year before or 2 years after the date of transfer). if the reinvestment is not made before the date of furnishing of ROI then the amount of NET CONSIDERATION(i.e. sale consideration less transfer exp.,if any) is required to be deposited in an account under CG accounts scheme in any nationalized bank.

-the deposit shall be made before the furnishing of ROI or within the due date of furnishing of ROI, whichever is earlier.

-the return of income(ROI) shall be accompanied by proof of such deposit.

hence, the last date of deposit under the said account in your case is 31st july2011.(being an individual assessee)

the exemption of LTCG is available to only INDIVIDUAL & HUF.

 
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Advocate

1) What is the last date when I can deposit the money in LTCG account so as to save tax? Is it 31-Mar-2011 or 31-July-2011 (Last date for IT return filings)?

Ans. The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme  which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset.

2) Do I need to deposit the complete difference between sale price and acquisition price into this account or do I need to deposit only difference between Sale Price and Indexed Cost of acquisition?

Ans. Yes only the LTCG amount needs to be deposited and not the entire sale consideration received.

 
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Advocate

Please note that due dates may differ in case the assessee is liable to tax audit (In case of a business man or a professional).

 
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Certified Financial Planner

How many times can I withdraw from the LTCG account opened at the Nationalised Bank ?

 
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TAXPOINT (Director) 9829551008

any No. of times you can withdraw from bank for the purpose of LTCG notified scheme. you should use with in 2 year that amount for the specifed purpose of LTCG notififed capital gain a/c.

 

Otherwise that amount you get received as tax exemption now taxable in that year in which you contravent.

 
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