Facebook TwitterLinkedInYoutubewhatsapp Start Planning for your Financial goals
Schedule Your Free Consultation
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Financial Planning chennai India, Private wealth management chennai India, Investment Advisory India, Systematic Investment Plan, Mutual Fund SIP, Mutual Fund ELSS, Tax Saving scheme

  • Home
  • About Us
    • Who we are & What we do
    • Services
      • Financial Road Map
      • Retirement Roadmap
      • Asset Allocation Plan
      • Webinar
      • Money Management
      • Wealth Management
    • In the Media
    • Testimonials
    • What Makes Us Different
    • How we can help you
    • Specialties
    • Honors and Awards
    • Vision & Mission
  • Resources
    • Blog
    • Articles
    • Podcast
  • Ideal Client
  • Contact Us
Query

What every investor needs to know about Capital Gains Account Scheme

by Holistic 13 Comments | Filed Under: Tax planning

Listen to this article


The Query

Mr Chaudhury has just sold his old ancestral house for a lump sum consideration of Rs.20,00,000. He has now set his eyes on a new apartment which is due for possession within the next two years. Mr. Chaudhury is in a dilemma, he is aware that the amount he has received is a Capital Gain in his hands and is liable to tax. His intention is to use this fund towards paying for his new abode. What are his options?

What is Capital Gains Account Scheme?

The Income Tax Act of India had foreseen such an eventuality and has thus launched the Capital Gains Account Scheme (CGAS) in 1988. As per the provisions of this capital gain account scheme, Mr Chaudhury can park his funds in this capital gain account and keep them outside the ambit of taxation if he opens the Capital Gains Account within the last date of filing his income tax returns.
Thus, assuming that he made the sale in the financial year 2016-17, Mr Chaudhury has to open the account and deposit the unutilized sum by 31st July 2017. In fact as per the provisions of the act anyone can save tax on Long Term Capital gains provided:

  • A residential property is purchased within 2 years of the sale having been effected.
  • A residential property is constructed within 3 years of the sale having been effected

Modalities of Capital Gains Account Scheme?

Having come to know about this capital gains account scheme, Mr Chaudhury is feeling relaxed, but he still needs to know more before he can actually accomplish his primary task of saving tax on Capital Gains.

Where can the Capital Gains Account Scheme-CGAS account be opened?

The Government has laid out a complete list of 28 PSU banks where this capital gain account scheme can be opened. SBI, its subsidiaries, UCO Bank, Bank of Baroda, Canara Bank, IOB etc., appear in this list. It is however to be noted that only urban and metro branches are permitted to offer this capital gain account to the customers and rural branches are not included. IDBI bank has been added to the list last year.

What are the types of deposits which can be made in Capital Gains Account Scheme?

I.Capital Gains Account – Type A – Savings Account:

This capital gain account is like a normal savings account and the interest payable on this account is the same as the rate of interest paid on any normal savings account by that particular bank.

II.Capital Gains Account -Type B – Term Deposit Account:

This capital gain account resembles a fixed deposit account, wherein the amount is deposited for a fixed period of time. The interest rate on this account is equivalent to the interest paid on fixed deposits by the bank. As Type B accounts are same as Fixed Deposits Account, any withdrawal from this type of account attracts a penalty for pre-maturity withdrawal.

Interests earned from both this capital gain accounts are liable to be taxed and attract TDS.

If Mr Chaudhury has to make the final payment for his apartment at one go then he would be better served by opening the Type B capital gain account. For those who are constructing a house, Type A capital gain account would be a better option as this would provide the flexibility of multiple withdrawals.

How to withdraw funds from Capital Gains Account Scheme?

The amount deposited in the Capital Gains Account can be withdrawn by making an application in the appropriate form. The amount so withdrawn needs to be utilized within 60 days from the date of such withdrawal and only for the specific purpose for which such withdrawal was made. The unutilised amount has to be re-deposited immediately.

For subsequent withdrawal in this capital gain account, an application is required to be made mentioning details of the manner/purpose in which the previous withdrawal was utilized.

Most banks do not issue any cheque books to the CGAS-Capital Gain Account Scheme holders as the withdrawal is effected by filling up the specified form only.

All amounts withdrawn in excess of Rs. 25000/- are disbursed by the bank through Demand Drafts directly in the name of the vendor or builder.

How to close the Capital Gain Account Scheme – CGAS account?

The Income Tax assessing officer can approve the closure of the account. On the closure of the capital gain account or after the lapse of three years, whichever is earlier, the entire unutilized funds lying in the account are liable to be taxed under capital gains.

Other Salient Features of the Capital Gains Account Scheme

  • Only Individuals and HUF are permitted to open Capital Gains Account.
  • The amount deposited in the Capital Gains Account is inadmissible as a security for any loan or guarantee.
  • The taxpayer can also appoint nominees to this capital gain account by making an application in the appropriate form.
  • The various subtitles associated with the Capital Gains Account Scheme have been demystified and discussed threadbare in the hope that individuals like Mr Chaudhury can now confidently go ahead and transform their realty plans into reality.

If you have any comments or questions, write them in the comment box below.

Or are you interested in creating a Comprehensive Financial Plan for your financial goals?

Skip the queue by registering for your 30 Minute FREE Financial Plan Consultation. Click the ‘‘BOOK YOUR SLOT NOW!’’ button below. 

Reader Interactions

Previous article: Here’s a Quick way to manage your Personal Finance Documents
Next article: How to get exemption from paying Capital Gain Tax?

Comments

  1. Shravan Musku says

    June 5, 2020 at 12:49 pm

    Hi,
    I have delayed amount in type A scheme. But want to invest the amount in other avenues others that specified by the scheme to avail exemption. So will my long term capital gain tax be deducted from the deposit if I want to close it. Or do I have to pay tax and get a approval from income tax officer?

    Reply
    • Holistic says

      August 8, 2022 at 12:52 pm

      You need to pay tax with penalty.

      Reply
  2. Rajan says

    July 12, 2019 at 3:42 am

    I have deposited gains from sale of property in capital gains FD scheme, however I was not able to purchase any property within 3 years time. Now the bank wants Assessing officer’s approval. However they are not paying any interest on the deposit saying that no inert is payable beyond 3 years. It has been over 2 years since the expiry of the FD. I have paid the full amount of tax liability. But the bank insists that no interest payable on the FD

    Reply
    • Holistic says

      October 22, 2021 at 5:44 pm

      “Yes, you need the Assessing officer’s approval to withdraw your money. Also, you won’t get any interest in your FD after maturity. Your money will stay idle till you withdraw your money.”

      Reply
  3. Bharat khandelwal says

    July 2, 2019 at 12:21 am

    Hi, I deposited money in cgas type B three years completed and I don’t want to purchase any property so can I purchase nhai bond to save tax

    Reply
    • Holistic says

      August 8, 2022 at 12:34 pm

      No.
      You need to pay tax with the penalty.

      Reply
  4. Atul says

    January 29, 2019 at 5:58 pm

    I opened long term capital gain account and put gain in long term capital gain FD in Aug-2015. I did not utilise this amount till now (3 years have gone). Now I want to withdraw the amount for purchasing residential plot. Bank is asking approval of assessing officer before giving me the amount.

    I can live with bank providing a DD in the name of the guy from whom I will purchase new plot. Do I still need AO’s approval?

    Reply
    • Holistic says

      February 22, 2019 at 5:53 pm

      Dear Atul,

      If you are buying a house, it should happen within 2 years.

      If you are constructing a house it should happen within 3 years. Then only capital gain exemption under section 54 is utilised.

      In your case, it is more than 3 years, so you can’t get an exemption. You need to pay tax and close the CGAS account. That’s why your banker is asking for a certificate from the assessing officer.

      Reply
  5. S says

    July 23, 2018 at 4:29 pm

    I have long term capital gains. I want to save capital gain tax by depositing it in capital gain account term deposits. I dont intent to buy or construct a new house. Can i do so? what will be the tax implications? If the matured amount is not utilised for buying/constructing house can i withdraw the mature amount. What will be the tax implcation in such case.

    Reply
  6. senthil kumar says

    October 8, 2017 at 8:52 pm

    Hi Sir
    I am senthil from Coimbatore, we sold our land in mom’s name coimbatore for 10.86 lakhs and invested that money fixed 3 year capital gain scheme in bank in my mom’s name. The amount is going to get matured now within 2 months. Is there any possibility that we can invest this money in govt bonds like rural electrificiation shceme or national highway scheme now ?.. as I dont want to buy any property. Please guide me.

    Thanks

    Reply
    • holistic says

      November 3, 2017 at 12:19 pm

      Dear Senthil Kumar,

      You can invest in REC or NHAI capital gain bonds to avoid paying capital gain tax. The maximum amount you can invest is Rs.50 lacs in a financial year. The current interest rate is 5.25% p.a.

      Rajan.

      Reply
  7. dr narang says

    September 26, 2017 at 4:17 pm

    i had deposited 1.25 cr in CGS account-type B a/c ,now what i want to know is how does the bank compound interest on the amt.-is it quarterely or half yearly,since i am facing a problem regarding deficit maturity amt. As of what i know is the maturity amt on F.D certificate is subject to 10 percent T.D.S and after that the remaining amount is payable by bank,kindly throw so light on this matter

    Reply
    • holistic says

      September 28, 2017 at 2:47 pm

      Dear Dr. Narang,

      Generally Banks compound the interest on a quarterly basis. TDS is deducted on the accrued interest and paid whenever they are due and not only on maturity. So the TDS deduction before maturity will affect the compounding effect to some extent.

      Ramalingam

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Client Login

Recent Posts

  • Tata AIA Life Insurance Wealth Pro Plan Review: Good or Bad?
  • Bajaj Allianz Life Smart Wealth Goal – Wealth Variant Plan Review: Good or Bad?
  • Max Life Savings Advantage Plan Review: Is It a Good Investment Choice?
  • Tata AIA Life Insurance Fortune Guarantee Pension Plan Review: Good or Bad?
  • HDFC Life Smart Woman Plan Review (2023): Is It Worth Investing?
Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Google Reviews

Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Footer

  • Articles
  • Gallery
  • Ideal Client
  • Jobs(Full Time)
  • Podcast
  • Services
  • Testimonials

Connect With Us

Holisticinvestment.in
10/15, Second Cross Street,
Seethammal Extn.,
Teynampet,
Chennai – 600 018,
INDIA.

Copyright © 2022. Holisticinvestment.in | All rights reserved.    Cared with ❤ by T-Square Cloud

×