Capital gain account scheme-income tax
dashrath patel
(Querist) 20 February 2014
This query is : Resolved
Dear Sirs,
I want to clear my case here:
My uncle sold N.A land of Rs.6 crores as on 27 june,2011.He had neither paid capital gain tax nor filed income tax return u/s139 within due date. He also failed to re- invest money in residential property.and not deposited money in capital Gain account scheme. Now IT department have sent notice u/s 133(6) requiring to produce the information. The only way to claim exemption U/s 54F is that he must purchase plot of land and construct a house within 4 months( i.e. 3 years from the date of transfer of property) LAST DATE 27/06/2014. So as per law the taxpayer shall made deposit before furnishing the return of income or due date of furnishing the return of income u/s139(1) i.e. 31 july,2012 whichever is earlier.
I am still confused IS IT MANDATORY TO DEPOSIT MONEY IN CGAS SCHEME?
R.V.RAO
(Expert) 21 February 2014
You can deposit the capital gains amount in a CGAS before the due date of filing tax returns (July 31) to save LTCG tax.
But treat CGAS as a parking place, where you can deposit money until you find a house that suits you, but of course within a time limit. The amount has to be parked in CGAS with the intention to use the funds to buy a new house within two years or to construct one within three years.
If you fail to buy or construct a new house within the stipulated period, the entire amount is treated as LTCG and you will have to pay tax on it.
SOURCE:WWW.TAXMANTRA.COM/FAQ ON CAP.GAINS
R.V.RAO
(Expert) 21 February 2014
You can deposit the capital gains amount in a CGAS before the due date of filing tax returns (July 31) to save LTCG tax.
But treat CGAS as a parking place, where you can deposit money until you find a house that suits you, but of course within a time limit. The amount has to be parked in CGAS with the intention to use the funds to buy a new house within two years or to construct one within three years.
If you fail to buy or construct a new house within the stipulated period, the entire amount is treated as LTCG and you will have to pay tax on it.
SOURCE:WWW.TAXMANTRA.COM/FAQ ON CAP.GAINS
R.V.RAO
(Expert) 21 February 2014
You can deposit the capital gains amount in a CGAS before the due date of filing tax returns (July 31) to save LTCG tax.
But treat CGAS as a parking place, where you can deposit money until you find a house that suits you, but of course within a time limit. The amount has to be parked in CGAS with the intention to use the funds to buy a new house within two years or to construct one within three years.
If you fail to buy or construct a new house within the stipulated period, the entire amount is treated as LTCG and you will have to pay tax on it.
SOURCE:WWW.TAXMANTRA.COM/FAQ ON CAP.GAINS
Anirudh
(Expert) 21 February 2014
Dear Mr.R.V.Rao,
Has not the limitation for depositing the CapitalGain into CGAS Account already over in this case?
dashrath patel
(Querist) 21 February 2014
Dear sirs,
CAN MY UNCLE CLAIM EXEMPTION U/S 54F IN REMAINING PERIOD OF 4 MONTHS EVEN THOUGH HE HAS NOT DEPOSITED MONEY IN THE CGAS?
Anirudh
(Expert) 21 February 2014
TO AVAIL THE BENEFIT, THE AMOUNT OF CAPITAL GAIN OUGHT TO HAVE BEEN DEPOSITED IN THE CGAS ACCOUNT WITHIN THE PRESCRIBED TIME.
Vineet
(Expert) 21 February 2014
I have also answered your query in forum. There is no escape from tax in given condition. Please pay tax with interest and file a belated return before 31-3-2014.
dashrath patel
(Querist) 21 February 2014
Thanks all of you ,
I had opinion of following so I have asked supra:
There are judgments wherein similar questions were observed by Hon’ble Gauhati High Court
(in CIT v. Rajesh Kumar Jalan (2006)) and ITAT Bangalore (in Shri Nipun Mehrotra v. ACIT
(2008)), favored the assessee and allowed the exemption wherein the amount was not
deposited in capital gain account within the prescribed time limit. However, in similar
situation, Hon’ble ITAT Delhi (in Taran Birsingh Sahni (2006)) took the contrarily view and
disallowed the claim of the assessee.
THANK YOU VERY MUCH FOR GIVING YOUR TIME
R.V.RAO
(Expert) 22 February 2014
In case of failure to file the return on or before the due date, belated return can be filed before the expiry of one year from the end of the relevant assessment year.
so yes.before march 2014,file a belated return and be prepared for penalty.
alternately file a return in reply to notice under sec.142(1)
R.V.RAO
(Expert) 22 February 2014
as rightly pointed by
sri anirudhji,the queriest exhausted time limit for CGAS and hence advised to opt for belated return.
Vineet
(Expert) 22 February 2014
Dear Mr Darshan Patel. can you please provide citation of the Guahati high Court and Bangalore Tribunal. Just wanted to know the facts and rational.
Anirudh
(Expert) 22 February 2014
Dear Mr. Vineet,
The citations for the two cases referred to by Mr. Darshan Patel are as under:
[2002] 122 TAXMAN 170 (GAUHATI)(MAG.) and
[2008] 110 ITD 520 (BANG.)
