Save Capital Gain Tax: You can save tax on long term capital gains of property. This is allowed in the income tax rules. But, there are some conditions for this. You have to reinvest the capital gains money in the property. You have to make this investment within the stipulated time limit.
Save Capital Gain Tax: After the Union Budget presented last month, the discussion on capital gains tax has increased. Tax has to be paid on the gains made on investment in real estate, gold and shares. This is called capital gains tax. There are many formulas for calculating this tax. In some cases, taxpayers get exemption on this tax. These include Capital Gains Account Scheme (CGAS). This account is opened for tax savings on capital gains.
What is the rule for saving tax?
Income tax rules state that if a taxpayer wants to save tax on capital gains made by selling real estate or gold, then he has to reinvest it in the prescribed options within a stipulated time. For this, this special account has to be opened. Many taxpayers are not aware of this properly. Knowing about this account will help taxpayers save capital gains tax.
When was CGAS started?
The government first introduced this account in 1988. You will need to open this account only when you want to reinvest the capital gains money. If you deposit the capital gains money in this account, then there will be no tax on it. If you do not reinvest this money or deposit it in this account, then you will have to pay tax on it.
In which section is this provided?
The provisions for tax saving on capital gains are mentioned in sections 54, 54B, 54D, 54F, 54G and 54GA of the Income Tax Act. It states that the capital gains money will be exempted from tax 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 matter, then you may suffer huge losses. It is important to keep in mind that more than Rs 1 crore cannot be deposited in this account.
Where to open CGS?
CGAS account can be opened in any bank including SBI. Capital gains 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.
Also Read-
- LIC’s new plans: Big news! LIC brings two new term insurance plans for youth, know full details
- EPFO account holders get free insurance of Rs 7 lakh, know how you can avail the scheme
- UPI payment system to change soon: NPCI is planning to change OTP and PIN for UPI transactions
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
