look news india
After the Union Budget presented last month, the discussion on capital gains tax has increased. Tax has to be paid on the profit made on investment in real estate, gold and shares. This is called capital gains tax. There are many formulas to calculate this tax. In some cases, taxpayers get exemption on this tax. These also include Capital Gains Account Scheme (CGAS). This account is opened to save tax on capital gains.
What is the rule of saving tax?
Income tax rules say that if a taxpayer wants to save tax on capital gains made on selling real estate or gold, then he has to reinvest it in the prescribed options within the prescribed time. For this, this special account has to be opened. Many taxpayers are not aware of it properly. Knowing about this account will help taxpayers save capital gains tax.
When did CGAS start?
The government first started this account in 1988. You have to open this account only when you want to reinvest the capital gain money. If you deposit the capital gain money in this account, then no tax will be levied on it. If you do not reinvest this money or deposit it in this account, then tax will have to be paid on it.
In which section it is provided?
The provisions for tax savings on capital gains are mentioned in sections 54, 54B, 54D, 54F, 54G and 54GA of the Income Tax Act. It states that tax exemption on capital gains money will be available only if this money is reinvested. This investment has to be made within the prescribed limit. If you do not follow the time limit in this case, then you may suffer huge losses. It is important to note that more than Rs 1 crore cannot be deposited in this account.
Where to open CGAS?
CGAS account can be opened in any bank including SBI. Capital gain money can be deposited in the account through cheque, cash or DD. Banks open two types of accounts. First, Type A account is considered a savings account. It gives the same interest as a savings account. Type B account works like an FD. It gives the same interest as an FD. Its lock-in period can be a maximum of 3 years.
