Indexation on capital gains tax has been changed. To save this tax you will have to invest it back. If you cannot invest then deposit it in the CGAS account.
New Delhi. Since the presentation of Budget 2023, the most discussed topic in the country is capital gain tax. Be it property or gold or shares, you have to pay capital gain tax on all profits. The government has also created many formulas to calculate this type of tax and many types of exemptions are also given to taxpayers on it. One such facility is available under the Capital Gain Account Scheme (CGAS). This special type of account is opened to avoid tax on capital gains, irrespective of the category of your capital gain.
Under the Income Tax Act, if you want to avoid tax on your capital gains i.e. profit from property or gold, then it has to be reinvested within the stipulated time limit and that too in the options suggested by the government. Most investors know about reinvesting their capital gains, but very few people know about this account. So, we give you details about how it works and how it can be opened.
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What is CGAS account
The government introduced this type of account for the first time in the year 1988. As we told you, under the Income Tax Act, you have to reinvest your capital gains within the stipulated time limit to save tax on them. Many times investors are unable to do this due to some reasons, so if you deposit that amount in the CGAS account, then it comes under the purview of tax exemption. If you do not invest and do not deposit in this account, then certainly capital gain tax will be levied on the profit you make.
No amount more than 10 crores will be deposited
Under Sections 54, 54B, 54D, 54F, 54G and 54GA of the Income Tax Act, investors are given the opportunity to save capital gains tax. This section provides tax exemption on profits if reinvested within the stipulated time and it is considered that you have not yet earned a profit and your money is still invested. Obviously, missing the timeline can cause you a huge loss. If you want to avoid this loss, you can deposit money in the CGAS account. However, it is important to keep in mind that an amount of more than Rs 10 crore cannot be deposited in this account.
Where to open and what are the benefits
CGAS account can be opened in any scheduled bank branch including SBI. This money can be deposited in cash, cheque, DD or any other way. Banks open accounts in two ways. Type-A account is treated as a savings account and the interest on it is same as that on a savings account. On the other hand, Type-B account works like an FD. You will get the same interest on it as on an FD, but its lock-in period is fixed, which can be a maximum of 3 years.
Tags: Business news, house tax, Property Tax
FIRST PUBLISHED : August 7, 2024, 18:57 IST
