Capital gain tax for layman- House Property

124 thoughts on “Capital gain tax for layman- House Property

  1. I sold land in May 2 2014 , invested cap gains IN cgas sbi ACCOUNT by feb 2015 sec54F exemption availed , booked a new under construction flat in March 2015 . I have utilised 75% of cap gains from CapGAINS ACCOUNT By doing payments to builder till feb 2017.
    My query is for underconstruction flat sec 54 F exemption availing condition of 3 years from date of sale , till when is last date by which 100% cap gains to be utilised i.e May 2 2017 or
    july 31 2017 (itr filing last date AY 2017-18) OR March 31 2018 (ay 2018-19)
    what happens if I cant utilise 100% cap gains before last date considering flat handing over is BY END OF MAY 2017

  2. Sir. I was the owner of 6 shares in a Housing co-operative in Mumbai (inherited from my late father) He did not buy or opt for a residential property (45 or 50 years ago) as he did not have sufficient funds. Now in 2009 the housing co-operative made an agreement with a builder to demolish and redevelop the property. The current owners of flats are being given flats 50 % bigger than the current flat and those who have shares were given an option to get one flat or get paid a fixed amount per share. Which is what I got. Does this amount come under capital gains. If so how do I go about investing in CG accounts or avenues.

  3. My parents had sold property which was on joined name, and kept money in NHAI capital gain bond 50 50 percent each, now after keeping for 1 year in capital gain my father died, now pls clarify me can the fathers kept amount in capital gain can be released as he died. Any rule about this in IT ( as 3 yrs r not completed as per capital gain rules).

  4. Hi Mr Venkata Ramani,

    I had sold a house in 2012 and deposited the capital gains in a capital gains account with SBI. I have periodically provided demand letter to the bank and paid the builder for the new house under construction (in 2012 itself). Now for the final installment, can I leave about Rs 5000 and pay the builder and get the registration done?
    Also then I could go ahead and close the capital gains account after getting an approval from the IT Assessment officer.
    Please help

  5. Dear Sir,
    A very educative article. A complex issue is quite clearly explained. Thanks!
    My question:
    I sold my flat in Dec/2011 and opened CGAS TD account with Syndicate bank (called VCC Capital Gain a/c by them) with the capital gain amount in Dec/2011. Now I have decided not to buy any property and instead use the money for personal use. If I close the CGAS account and withdraw the entire amount, when do I pay the capital gain tax? Now on withdrawal OR on or before July/31 2013? Which form will I use to make withdrawal? Form G? Do I pay any penalty for not paying CG tax till now?
    Thanks in advance.

    1. Please consult one chartered accountant for details. For withdrawing money from capital gain account, I think the letter from ITO may be necessary. I think you have to pay capital gain tax and revise your return for the concerned financial year if not assessed so far for that particular year ie.11-12. You have to pay interest also for the delayed payment. So approach some auditors and take their advice .


  6. Hi Sir,

    I am selling my flat & will get money before 31st March, 2013. (Ques 1) If I don’t wish to buy new house in 2013, can I keep that money in my private bank’s Saving Account & later transfer it to “Capital Gain Account Scheme” till 31-07-2013 (expected IT returns filling date). (Ques 2) If i wish to buy a new house before 31st July, 2013, will there be any tax implications if I use that money directly from my savings bank a/c?

    thanks & Regards

  7. sir,
    can you tell me how to withdraw cash money from capital account (saving type) ?
    is there any provision to withdraw money in cash form from capital account for the purpose of construction of house ?

    1. Dear sir,

      You can withdraw cash after getting letter from your ITO for release of money as you are not under any obligations of capital gains tax. For payment to construction of house, it can be done with cheque only to my knowledge.


      1. sir,
        actually the question is i want to pay the wages to the workers, and which is done by cash amount, so how to do that ?
        the cheque is drawn on whose name ,worker or account holder?

        1. It is better to consult Chartered accountant nearby who can advice you in this regard. My suggestion will be pay in cash and obtain receipt and then withdraw from bank the spent amount.


  8. sir,
    i hav only 1 lakh left in my CGA. i dont want to buy any property.i want to withdraw only 50,000. what can i do sir please help!!!!

  9. Dear venkata;
    can I utilise capital gain money from my capital gain account to buy a residential property along with my son as joint holder


  11. Hello sir,

    I understand that once I purchased another property in the specific 2 yrs time, I have to keep that asset for 3 yrs minimum.
    My question is, what if I get a good price of the same in say… 1 and a half years. OR what if I have no choice but to sell the property in any case within 3 years, What will happen then? What will be my obligations?

    Another query – I read under the section 54F of income tax law on that the land or house has to be within 8 kms of the limits of municipality dept., be it residential or agricultural land. So, can I buy an agriculture land within this limit. I won’t fall under the tax bracket then, right?

    1. Nothing except that you have to pay additional tax for the concerned year of capital gains by revising the return in which earlier you have not paid capital gain tax. venkat

    2. For your first question, the income tax benefit you got will be withdrawn and you have to redraw the said financial year return adding the capital gain in your income .
      For your second query, for agri lands, no income tax benefits given even though it is within municipal limits. Only when you construct a house in a land, then land and building costs can be allowed for considering set off within the allowed period

  12. Mr. Ramani, i will be obliged if you can tell me that incase i am not able to construct a house within 3 years of the stipulated time period and i still have an X amount lying in my capital gains a/c which i do not intend to use further in the construction and want to pay capital gain tax, then how can i then take out the remaining money from my capital gains a/c in the bank and pay my tax.

  13. Dear Sir,
    I received money against sale of land on 15.12.10 but i put the same amount in Capital gains account ON 2.8.11. Will I have to pay tax????

    1. Dear saby,

      Before 31.7.11, you should have deposited money in capital gains account. So I think you have to pay tax.Anyhow just have consultation with your IT officer and a chartered accountant and decide future course of action. venkat

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