Yes the Accrued interest can be credited to General SB Account.
The money from Capital Gains can be withdrawn for purchase of residential property with in specified period.
Only one residential property can be purchased with the CG amount.
Utilisation of Interest on CGAS & form of withdrawal
Reg.Long erm Capital Gains on sale of Immovable property. 1. can I utilise the interest for any other purpose? 2. If the accrued interest can be credited to General SB Account? 3. In what form money can be withdrawn out of Capital Gain Amount for the purpose of reinvestment in condtruction/purchase? Cash, cheque or DD? 4.If a block of two or more apartments/villas contiuguous in nature be puecsed for reinvestment? What are the limitations of ONE HOUSE allowed? Thanks and regards.
Asked 8 years ago in Capital Gains Tax
Thank you Mr.Modani for your prompt response.
I am still not clear on some issues raised by me.
Item 1: Should the interest part also along with Gain amount be spent on reinvestment of another asset,
or am I free to use it for domestic expenditure?
Item 3: Since the Bank where my CG account stands, didn't issue cheque book.
I was told I have to draw Using form C or D.
Suppose I have to pay say Rs.50 lakhs to the builder as advance in Cheque or DD and cash say 5 lakhs to labour to labour.
In such case, will the bank pay me in Cash, DD or transfer the amount to my general account?
Item 4: If I purchase 2 abutting Villas registered in my favor as a single property, how is it considered by Tax Authorities?
I shall be thankful if you can clarify the above doubts.
Thanks & Cheers!Asked 8 years ago
1No only the principle is enough to be spent on purchase of property.
2.Interest you are free to use for domestic purpose.
3. You can give standing instruction to CG to credit the same to your Savings Account.
Dear Sir,
1. You are free to utilise interest for other purposes.
2. Yes, accrued interest can be credited in S/B account.
3. Better avoid withdrawing the money in cash.
4. This is a question of litigation. Courts have conflicting views in respect of this.
Please feel free to call/revert in case of doubts.
Thanks and Regards,
Abhishek Dugar
CA, CS, B.Com
Dear Sir,
1. You are free to use the interest component in whatsoever manner you feel like.
2. The bank will transfer the amount to your savings bank account.
3. Buying 2 Neighbouring villas is a litigative area, you may claim the benfit by proving that it is not one house property but one as you are using it as a single property.
Trust this clarifies your query.
Feel free to call back/ get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP.
Thanks a lot Mr.Rohit. You fully cleared all my doubts. But an extended question on the subject. Can I gift my currently owned apartment to my wife to be able to buy a new villa to avail maximum benifit of exemption in respect of reinvestent in purchase a new house property? Thanks again.
Asked 8 years ago
I think Rohit is handling this query
The question is for Mr. Rohit thus will not comment
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