What is CGAS account?

To address this, the concept of Capital Gains Account Scheme(CGAS) was introduced. If you have not made such an investment before your file the ITR, you can, as an alternative, deposit the capital gains in a capital gain account with a bank under the Capital Gains Account Scheme (CGAS).

Who can open CGAS?

Who is eligible to open this account? Any person/firm/association of persons/company/HUF intending to avail the benefits under Section 54, 54B, 54D, 54F and 54G of the Income Tax Act, can open an account under CGAS.

What is the penalty for capital gains account?

If the amount is not utilised within three years for purchasing/constructing a house, it will be taxable after the expiry of three years from the date of sale. In your case, if the amount is not utilised within three years, then it will be taxable at 20% in 2019-20, along with 4% cess. No penalty will be levied.”

How do you use capital gain money?

You can invest the capital gains you obtained by selling a property in a public sector bank or other banks approved by the capital gains account scheme of 1988. In your income tax returns, you can claim tax exemptions for the money you have parked in capital gains accounts in approved banks.

Can private banks open capital gain account?

A capital gain account can be opened in any authorized bank recommended by the Government which includes Central Bank of India, State Bank of India and its subsidiaries, Syndicate Bank, IDBI Bank, Bank of Baroda and Corporation Bank. Capital Gain Account facility is unavailable in rural banks.

Is it compulsory to open capital gain account?

Only Individuals and HUF are allowed to open capital gains account. The amount deposited in the Capital gains account cannot be offered as a Security for any Loan/ Guarantee. To close the Capital Gains Account, an application in Form G is required to be made.

Can capital gain account be transferred?

You are allowed to transfer the account from one branch of the bank to another, but not from one bank to another bank. Also ensure that you utilise the amount deposited in capital gains account within 2 years of sale of property to avail the benefits under Sections 54, 54EC and 54F.

What does CGAS stand for in capital gains account?

Under the Capital Gains Account Scheme, taxpayers can park their capital gains until they are reinvested. What is Capital Gains Account Scheme or CGAS? Capital Gains Account Scheme (CGAS) allows individuals to safeguard their long-term capital gains until they are able to invest it as specified in Sections 54 and 54F.

When was the capital gains Account scheme introduced?

Thus, the government introduced the concept of the CGAS Scheme i.e. Capital Gain Account Scheme in the year 1988. As a part of this capital gain scheme, the taxpayer has the option to open a CGAS account and park the funds till the time they are re-invested to claim the exemption under Capital Gains.

What are the different types of Capital Gain accounts?

Two types of accounts can be opened in banks under the Capital Gain Account Scheme (CGAS) viz. CGAS savings account (Account A) or CGAS term deposit (Account B).

Can you open a CGAS account in India?

In India all the banks are not recognized to open accounts under capital gain account scheme (CGAS). So you need to make sure that the bank or the branch of the bank where you are opening this account are having necessary approval to open account under capital gain account scheme (CGAS). All rural braches are not recognized to open CGAS account.