I executed an agreement in May 17 for sale of land. The agreement is valid for eleven months.I received a part of amount and kept in my S/B account.My question is 1) How long I can park the amount in my S./B a/c 2)When should I open a capital gain a/c 3)what is the role of I.Tax dept. in operating the capital gain a/c. Thanks.Expecting an early reply Arun Charan
You can keep the money in saving account until you file the return of income for the year in which sale happens.
Suppose if sale happens in FY 2017-18, you have to transfer the money in capital gain account before filing of return of income I.e. before 31 July 2018.
Please let m know whether you have given the possession to the buyer or not?
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
What is the role of I. tax department while operating a Capital gain account?
1) You can continue to maintain the amount in your SB A/c
2) You need to open capital gain account within 6 months from the date of transfer of the land or the due date for the filing of your IT Return.
3) The IT Dept does not have any role in operating the capital gain account. The only requirement is that you should have evidence for the opening and operating the capital gain account in accordance with the provisions of the Income Tax Act.
Hi Arun,
To start with, as the sale agreement is executed on May 17 , this would be forming part of your AY 2018-19 (PY 2017-18). Due date for the same as per section 139 is July 31 (hope you are filing the tax return in the capacity of individual).
Coming to the 3 core questions raised by you ,
1) You can park this amount in your S/B account till the due date as per section 139 -July 31 2018.
2) In principle, you can open a Capital Gain Deposit account before the afore said due date. However it is safe to open the same a month or two ahead to ensure error free documentation. - say April 30 2018. Accordingly the date in pt.1 above would be April 2018.
3) Proof of Deposit needs to be documented and furnished whenever demanded by the department. The amount in this account cannot be used for any purpose other than the designated investment. Hence any application of funds from this account for any other purposes would be charged to tax.
Hello,
You have to transfer the funds before the date of Filing of Income Tax Returns i.e in your case will be 31st July 2018, considering your agreement is dated 31st May 2017.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
