Hi - I am selling my existing flat and planning to invest the entire amount received from the sale into another property. I registered my existing flat in August 2015. I have the following questions regarding capital gains tax on this transaction: 1. I plan to use the entire amount from the sale of the existing flat to buy a new property within this financial year (i.e. before 31-March-2019), can I deposit this money into a regular savings account? Or, do I need to open a Capital Gains Account and deposit this money there? 2. Will I incur any capital gains tax on this transaction? 3. Under what circumstances am I required to make use of a Capital Gains Account when it comes to the sale and purchase of property?
Hi
1. If investing upto 31 March 19, you may use normal saving account.
2. Since you're investing entire consideration in another residential house Property, capital gains shall be exempt under section 54.
3. If the amount is not invested upto due date of return filing I.e. 31 July 2019, you need to deposit it in capital gain deposit account.
Since you have purchased this flat in August 2015, so you have held it for more than 2 years therefore it's a long term capital asset and you need to provide the value of purchase and sale so that I can calculate capital gain tax and other things.
However assuming you will have capital gain you will have two option to get exemption from such gain either by investing in some residential house u/s 54 or investing in various bonds listed in section 54EC of the act. However since you are saying you are going to invest in property I don't think it will save your capital gain tax and you will have to pay capital gain tax.
Regarding putting the money in capital gain account I would like to say that one need to put the money in capital gain account if they are unable to use the money of capital gain before the filing of return of income of the financial year in which they earned it and they say that they would use it to calim exemption and they don't want to pay capital gain tax. In such case one need to keep amount in capital gain account.
However if you are clear that you will pay capital gain tax and you will invest such amount in the property then you can keep the amount easily in your saving account.
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Thank you
Hi,
- You can deposit it into normal saving account if you will utilize it before filing of ITR for the F.Y. 2018-19 i.e. A.Y. 2019-20.
- Figures are not available so can't say whether capital gain or loss will arise.
- When the gain can not be utilized before the filing of ITR for the relevant previous year and assessee plans to utilize it within the stipulated period as mentioned in exemption section.
- If the value of new flat exceeds Rs.50 lacs, ensure that proper TDS will be deducted by you.
Thanks
Dear Sir,
Hope you are doing well !
1. Yes, you can deposit this money in regular saving account .
2. As we are not able to comment without any data. However in case of capital gains, if you are investing entire consideration in new residential property, then the capital gain shall be exempt u/s 54.
3.If the entire amount is not invested up to due date of filling i.e. 31/07/2019 , then you need to deposit in capital gain deposit account.
Thanks & Regards,
Payal Chhajed
Hi,
1. Yes, you can deposit the money in normal savings account if you are buying the property on or before 31 July 2019.
2. No, your entire capital gain will be exempt assuming both the properties (old and new) are residential house/flat.
3. You will have to open CGDS account if you are planning to buy a property after 31 July 2019.
If you have not more than one residential property in your name you can avail exemption u/s 54 bu investing another residential property within stipulated time if invest in same FY then can deposit to SB A/c but plans to buy in next FY then before due date of ITR filing next year you have to deposit the same in CG A/c with bank
If invest all sale amt then no tax
Dear Sir,
1. Yes, you can deposit the money in normal savings account provided you are buying the property on or before 31 July 2019.
2. No,
3. You will have to open CGDS account if you are investing the amount to buy a property after 31 July 2019.
Hi,
1. You can deposit the money in normal savings account provided you are buying the property on or before 31 July 2019.
2. No
3. You will have to open CGDS account if you are planning to buy a property after 31 July 2019.
Regards,
Nikhil.
THe gains from the sale of property will be treated as long tern capital gains. IN case you utlisise the entire fund during the year, there is no need to open Capital gains account scheme. The account is to be opened if you failed to utlise the gains for purchase of new house before the date of furnishing the return of income for that year.
As per sec 54 of the income-tax act, the new house is to be acquired with in 2 years of selling the old house. THe gains are to be kept in the account if the tax payer does not buy property in the same year.
1. You need to deposit the funds into capital gains account.
2. If you did as per above and intention is to buy house property and no other house property is there then no tax other wise need to assess the tax-ability.
3. No need.
