Sale of property

1) If I sale "X" property and get Money , Can I also clear Loan on Property "Y" which is outstanding and then Balance amount can be put in "Capital  gain account"
2) also Please clear can I pay Income tax on interest of Capital gain amount by withdrawing same from "Capital gain account"  mean is that accessable money for paying income tax on intrest paid by bank while filing return
Asked 2 years ago in Capital Gains Tax from Pune, Maharashtra
1. For your query one our view is that after paying the capital gains arising from transfer of property X you can clear loan on property Y or you can do whatever with that amount. If you want to invest in capital gains account then you need to put the full amount or gain amount as per various sections of the Act.

2. You can always give standing instruction to the Banker to credit the interest accrued on Capital Gains Fixed Deposit to your savings account every year and the same you can withdraw any time. The Banker will deduct TDS on the interest amount which can be claimed at the time of filing returns
Shyam Sunder Modani
CA, Hyderabad
1373 Answers
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1 After repaying loan the balance is less than capital gains then you will get proportional deduction u/s 54.
2 No you cannot withdraw monies for payment of income tax except for last withdrawal.
Vijay N. Kale
CA, Hyderabad
248 Answers
4.9 on 5.0
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