Hi, Reinvesting your capital gains into another capital asset can be highly beneficial because it allows you to defer or even reduce your tax liability. Here’s how it works: Tax Exemption/Deferral: By reinvesting your gains into a qualifying asset (such as residential property under Section 54 or otRead more
Hi,
Reinvesting your capital gains into another capital asset can be highly beneficial because it allows you to defer or even reduce your tax liability. Here’s how it works:
Tax Exemption/Deferral: By reinvesting your gains into a qualifying asset (such as residential property under Section 54 or other assets under Section 54F of the Income Tax Act), you can claim an exemption on the tax that would otherwise be payable on your capital gains. This means you keep more of your money working for you rather than handing it over as tax.
Enhanced Investment Growth: Deferring the tax liability means that the full amount of your gains is available for reinvestment. This boosts your capital, allowing for potentially higher returns over time through compounding.
Improved Cash Flow: Since you’re not required to pay the tax immediately, you retain liquidity and can allocate funds strategically across different assets or opportunities.
Long-Term Financial Planning: Utilizing these exemptions effectively supports a more tax-efficient investment strategy, helping you build wealth over the long term without unnecessary tax erosion.
Yes, profit earned from the sale of land, building, or both is chargeable to Capital Gains Tax under the Income Tax Act, 1961. However, the tax treatment depends on the holding period of the asset: 1️⃣ Type of Capital Gain: ✔ Short-Term Capital Gain (STCG): If the land/building is sold within 24 monRead more
Yes, profit earned from the sale of land, building, or both is chargeable to Capital Gains Tax under the Income Tax Act, 1961. However, the tax treatment depends on the holding period of the asset:
1️⃣ Type of Capital Gain:
✔ Short-Term Capital Gain (STCG):
If the land/building is sold within 24 months from the date of purchase, the profit is treated as short-term capital gain (STCG).
Taxable as per your income tax slab rate.
✔ Long-Term Capital Gain (LTCG):
If the land/building is held for more than 24 months, the profit is classified as long-term capital gain (LTCG).
Taxed at 20% with indexation benefit under Section 112.
Closing a Capital Gains Account Scheme (CGAS) account requires following the proper procedure, especially when only interest remains. Since your branch manager has requested Form G with the Assessing Officer's (AO) endorsement, here’s the step-by-step guide to get it: Step 1: Prepare Form G Form G iRead more
Closing a Capital Gains Account Scheme (CGAS) account requires following the proper procedure, especially when only interest remains. Since your branch manager has requested Form G with the Assessing Officer’s (AO) endorsement, here’s the step-by-step guide to get it:
Step 1: Prepare Form G
Form G is the prescribed form under the Capital Gains Accounts Scheme, 1988, for closing the account and withdrawing the remaining funds. You need to fill out the form with: ✅ Your personal details (Name, PAN, Address, Account No.) ✅ Bank details where the capital gain account is held ✅ Reason for closure (In your case, only interest remains) ✅ Details of amount already disbursed and remaining balance
Step 2: Approach Your Jurisdictional Assessing Officer (AO)
Visit the AO’s office with: 📄 Duly filled Form G 📄 Passbook/Statement of your CGAS account 📄 Copy of PAN Card 📄 Copy of Last ITR filed 📄 Bank’s request letter (if any)
Step 3: Obtain AO’s Endorsement
Submit Form G along with documents to the AO.
The AO will verify whether the capital gain amount was utilized as per the exemption rules.
If satisfied, they will endorse and sign Form G, permitting closure.
Step 4: Submit to the Bank
After getting AO’s approval, submit the endorsed Form G to your bank.
The bank will process the closure and release the remaining interest amount (after TDS deduction, if applicable).
Ensure you take the final statement from the bank for your records.
Key Points to Note
✔️ Timelines may vary depending on AO’s workload, so follow up if needed. ✔️ Interest earned is taxable as per your income slab. ✔️ If you face delays, you may escalate the matter with your jurisdictional Principal Commissioner of Income Tax (PCIT).
Once done, your Capital Gains Account will be officially closed, and you can use the interest as per your requirement. ✅
Yes, there are specific bonds available under the Income Tax Act that allow you to invest your capital gains and claim tax relief. One of the primary avenues is provided under Section 54EC of the Act. How It Works: Section 54EC Bonds:If you have incurred capital gains from the sale of an asset, youRead more
Yes, there are specific bonds available under the Income Tax Act that allow you to invest your capital gains and claim tax relief. One of the primary avenues is provided under Section 54EC of the Act.
How It Works:
Section 54EC Bonds: If you have incurred capital gains from the sale of an asset, you can invest those gains in specified bonds—such as those issued by the National Highways Authority of India (NHAI) or the Rural Electrification Corporation (REC).
Tax Exemption: By investing in these bonds, you can claim an exemption from capital gains tax on the invested amount, up to a certain limit (currently ₹50 lakh per financial year).
Holding Period: These bonds are non-convertible and must be held for a minimum period, usually three years, to avail the tax benefit.
Key Points to Remember:
Investment Limit: The exemption is available up to the prescribed limit per financial year.
Purpose: This measure encourages the flow of capital into infrastructure and other government-promoted sectors.
No Other Eligible Bonds: While Section 54EC is the most common route for capital gains bonds, always review the latest provisions, as tax laws can evolve.
By investing your capital gains in these bonds, not only do you help fund critical infrastructure projects, but you also reduce your tax liability. This strategy can be an effective way to manage your taxes while supporting national development initiatives.
Yes, the interest earned on amounts deposited in a Capital Gains Account under the Capital Gains Account Scheme (CGAS) is taxable. This interest income is subject to tax in the year it accrues, irrespective of whether the funds are withdrawn. Tax Deducted at Source (TDS) is applicable to this interRead more
Yes, the interest earned on amounts deposited in a Capital Gains Account under the Capital Gains Account Scheme (CGAS) is taxable.This interest income is subject to tax in the year it accrues, irrespective of whether the funds are withdrawn.Tax Deducted at Source (TDS) is applicable to this interest, and the depositor receives a TDS certificate for the amount deducted
When you deposit your capital gains into a Capital Gains Account Scheme (CGAS) to claim an exemption under sections like 54, 54F, or 54EC, you may later need to withdraw funds from this account when you actually make the required investment. Key Point:There is no distinct, numbered form prescribed iRead more
When you deposit your capital gains into a Capital Gains Account Scheme (CGAS) to claim an exemption under sections like 54, 54F, or 54EC, you may later need to withdraw funds from this account when you actually make the required investment.
Key Point: There is no distinct, numbered form prescribed in the Income Tax Act specifically for the withdrawal of funds from a Capital Gains Account. Instead, the process is carried out online.
How It Works:
Online Application: You are required to log in to the official Income Tax e-filing portal where the Capital Gains Account Scheme is managed.
Within this online module, you will find an option to submit a withdrawal request.
You need to furnish the necessary details, such as the amount you intend to withdraw and the purpose of the withdrawal (for example, for acquiring a new asset to claim an exemption).
Supporting Documents: Along with your online request, you must upload or submit the relevant documents, such as evidence of the intended investment. This ensures that the withdrawal is used in accordance with the provisions of the Act.
Approval Process: Once your request is submitted, the authorities will process it. On approval, the funds will be released from the Capital Gains Account and can be used to make the qualifying investment.
Bottom Line:
There isn’t a separate “Form 10D” or similar for withdrawing funds. Instead, you complete a withdrawal application through the online Capital Gains Account Scheme portal on the Income Tax e-filing website. This streamlined process is designed to facilitate the smooth utilization of your capital gains for eligible investments.
TDS is NOT applicable on Demat account opening charges because they are in the nature of bank charges or service charges, which do not fall under any specific TDS provision. Such charges are generally considered as a payment for services, and TDS is applicable only if the payment falls under a speciRead more
TDS is NOT applicable on Demat account opening charges because they are in the nature of bank charges or service charges, which do not fall under any specific TDS provision.
Such charges are generally considered as a payment for services, and TDS is applicable only if the payment falls under a specific section of the Income Tax Act.
Since Demat account opening charges are generally not categorized as professional fees, commission, or contractual payment, TDS is NOT required to be deducted under the Income Tax Act.
As per Rule 138 of the CGST Rules, 2017, an E-Way Bill is NOT required in the following cases: Goods Value Below ₹50,000 (Rule 138(1)) If the value of goods (excluding GST) being transported is less than ₹50,000. Transport by Non-Motorized Vehicles (Rule 138(14)(a)) No E-Way Bill is required if goodRead more
As per Rule 138 of the CGST Rules, 2017, an E-Way Bill is NOT required in the following cases:
Goods Value Below ₹50,000 (Rule 138(1))
If the value of goods (excluding GST) being transported is less than ₹50,000.
Transport by Non-Motorized Vehicles (Rule 138(14)(a))
No E-Way Bill is required if goods are transported using bicycles, rickshaws, bullock carts, hand carts, etc.
Transport Within 10 km (Rule 138(3))
When goods are moved within 10 km from a consignor’s place to a transporter for further transport, and a delivery challan is issued.
Transport of GST-Exempted Goods (Rule 138(14)(d) & Notification No. 12/2017-Central Tax (Rate))
E-Way Bill is not required for goods that are fully exempt from GST, such as:
Fresh fruits & vegetables
Live animals
Milk & dairy products (unprocessed)
Newspapers & books
Raw silk, wool, khadi, etc.
Movement Under Customs Control (Rule 138(14)(g))
When goods are moved under customs supervision, including:
From a customs port/airport/ICD to another customs station.
From ICD/CFS to customs port for export clearance.
If goods are being transported to or from Nepal/Bhutan, an E-Way Bill is not required.
Transport by Government or Defence Agencies (Rule 138(14)(ii))
Goods transported by Defence Ministry, government agencies, or law enforcement authorities do not need an E-Way Bill.
Movement of Empty Cargo Containers (Rule 138(14)(m))
If empty containers are being transported, no E-Way Bill is required.
Movement of Goods for Job Work (Notification No. 12/2018-Central Tax, Rule 138(14)(n))
When goods are sent for job work from a registered person to an unregistered job worker, an E-Way Bill is not required within the same state.
Transport by Rail (Certain Cases) (Rule 138(2A))
If goods are transported by rail, an E-Way Bill is not required if the railway authorities issue a transport receipt and the supplier/buyer complies with GST documentation.
These provisions ensure that small-value shipments, government-regulated goods, and special cases like customs and defense-related movements are exempt from the E-Way Bill requirement.
Ind AS applies based on company size and listing status. 1. Mandatory Applicability: From April 1, 2016 → Listed & unlisted companies with net worth ₹500 crore+. From April 1, 2017 → All listed companies & unlisted companies with net worth ₹250 crore+. From April 1, 2018 → Banks, NBFCs &Read more
Ind AS applies based on company size and listing status.
1. Mandatory Applicability:
From April 1, 2016 → Listed & unlisted companies with net worth ₹500 crore+.
From April 1, 2017 → All listed companies & unlisted companies with net worth ₹250 crore+.
From April 1, 2018 → Banks, NBFCs & insurance companies with net worth ₹500 crore+.
From April 1, 2019 → NBFCs with net worth ₹250 crore+.
2. Voluntary Adoption:
Any company can opt for Ind AS but cannot switch back to old standards.
3. Not Required for:
Small companies not meeting the above criteria.
Some banks & insurance companies (Ind AS implementation under discussion).
Net Worth = (Paid-up Share Capital) + (Reserves & Surplus) – (Accumulated Losses) – (Deferred Expenditure Not Written Off)
TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc. Here is the detailed analysis of sec 194 J TDS under section 194J is deducted on payments exceeding the threshold limRead more
TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc.
Here is the detailed analysis of sec 194 J
TDS under section 194J is deducted on payments exceeding the threshold limit for below payments.
Type of Payments
Rate of tax deduction
Threshold Limit
Technical service
2%
Rs. 30,000
Payment of royalty for sale, distribution or exhibition of cinematographic films.
2%
Rs. 30,000
Other Royalty
10%
Rs. 30,000
Professional Services
10%
Rs. 30,000
Non-compete fees or fees paid not to share any technical knowledge or know-how
10%
Rs. 30,000
Payments made by the company to directors by way of fees, commissions or remuneration
10%
Nil
Professional services include following services:
Legal
Medical
Engineering
Architectural
Accountancy
Technical consultancy
Interior decoration
Advertising
Film artist
Company secretary
Authorised representatives
Profession of information technology
Sportspersons
Commentators
Event managers
Anchors
Umpires and referees
Physiotherapists
Coaches and trainers, team physicians, and sports columnists
Fees for technical services include the following payments:
Services that involve technical expertise or expertise in technology.
Managerial services and management of the client’s business.
Consultancy services and business advisory services.
Note: Technical service does not include services provided by machines or robots.
Royalty means the payment made for:
Transfer of rights or usage of an invention, model, design, trademark, patent, etc.
Use of patents, inventions, designs, etc.
Provide any information related to using an invention, patent, formula, etc.
Transfer of rights related to scientific findings, literary work, films or videotapes for radio broadcasting but does not include consideration for the sale, exhibition, or distribution of cinematographic films.
Providing any information related to technical, industrial, commercial or scientific knowledge, experience or skill
Non-compete fees include the payment made for an agreement for not sharing any license, patent, trademark, franchise, know-how, commercial or business rights, or information to any other person for processing, manufacture, or provisional service.
What is the benefit of re-investment of capital gain in any other capital asset?
Hi, Reinvesting your capital gains into another capital asset can be highly beneficial because it allows you to defer or even reduce your tax liability. Here’s how it works: Tax Exemption/Deferral: By reinvesting your gains into a qualifying asset (such as residential property under Section 54 or otRead more
Hi,
Reinvesting your capital gains into another capital asset can be highly beneficial because it allows you to defer or even reduce your tax liability. Here’s how it works:
-
-
-
-
See lessTax Exemption/Deferral: By reinvesting your gains into a qualifying asset (such as residential property under Section 54 or other assets under Section 54F of the Income Tax Act), you can claim an exemption on the tax that would otherwise be payable on your capital gains. This means you keep more of your money working for you rather than handing it over as tax.
Enhanced Investment Growth: Deferring the tax liability means that the full amount of your gains is available for reinvestment. This boosts your capital, allowing for potentially higher returns over time through compounding.
Improved Cash Flow: Since you’re not required to pay the tax immediately, you retain liquidity and can allocate funds strategically across different assets or opportunities.
Long-Term Financial Planning: Utilizing these exemptions effectively supports a more tax-efficient investment strategy, helping you build wealth over the long term without unnecessary tax erosion.
Whether profit earned from sale of land or building or both chargeable to capital gain tax?
Yes, profit earned from the sale of land, building, or both is chargeable to Capital Gains Tax under the Income Tax Act, 1961. However, the tax treatment depends on the holding period of the asset: 1️⃣ Type of Capital Gain: ✔ Short-Term Capital Gain (STCG): If the land/building is sold within 24 monRead more
Yes, profit earned from the sale of land, building, or both is chargeable to Capital Gains Tax under the Income Tax Act, 1961. However, the tax treatment depends on the holding period of the asset:
1️⃣ Type of Capital Gain:
✔ Short-Term Capital Gain (STCG):
If the land/building is sold within 24 months from the date of purchase, the profit is treated as short-term capital gain (STCG).
Taxable as per your income tax slab rate.
✔ Long-Term Capital Gain (LTCG):
-
-
See lessIf the land/building is held for more than 24 months, the profit is classified as long-term capital gain (LTCG).
Taxed at 20% with indexation benefit under Section 112.
I want to close my capital gain account. The capital gain amount is already disbursed and only interest is lying in account. The branch manager asked for Form G with AO’s endorsement on it. How to get it? Please advise procedure?
Closing a Capital Gains Account Scheme (CGAS) account requires following the proper procedure, especially when only interest remains. Since your branch manager has requested Form G with the Assessing Officer's (AO) endorsement, here’s the step-by-step guide to get it: Step 1: Prepare Form G Form G iRead more
Closing a Capital Gains Account Scheme (CGAS) account requires following the proper procedure, especially when only interest remains. Since your branch manager has requested Form G with the Assessing Officer’s (AO) endorsement, here’s the step-by-step guide to get it:
Step 1: Prepare Form G
Form G is the prescribed form under the Capital Gains Accounts Scheme, 1988, for closing the account and withdrawing the remaining funds. You need to fill out the form with:
✅ Your personal details (Name, PAN, Address, Account No.)
✅ Bank details where the capital gain account is held
✅ Reason for closure (In your case, only interest remains)
✅ Details of amount already disbursed and remaining balance
Step 2: Approach Your Jurisdictional Assessing Officer (AO)
Find out who your AO is by checking the Income Tax Department’s e-filing portal https://www.incometax.gov.in.
Visit the AO’s office with:
📄 Duly filled Form G
📄 Passbook/Statement of your CGAS account
📄 Copy of PAN Card
📄 Copy of Last ITR filed
📄 Bank’s request letter (if any)
Step 3: Obtain AO’s Endorsement
Submit Form G along with documents to the AO.
The AO will verify whether the capital gain amount was utilized as per the exemption rules.
If satisfied, they will endorse and sign Form G, permitting closure.
Step 4: Submit to the Bank
After getting AO’s approval, submit the endorsed Form G to your bank.
The bank will process the closure and release the remaining interest amount (after TDS deduction, if applicable).
Ensure you take the final statement from the bank for your records.
Key Points to Note
✔️ Timelines may vary depending on AO’s workload, so follow up if needed.
✔️ Interest earned is taxable as per your income slab.
✔️ If you face delays, you may escalate the matter with your jurisdictional Principal Commissioner of Income Tax (PCIT).
Once done, your Capital Gains Account will be officially closed, and you can use the interest as per your requirement. ✅
See lessWhether interest received on amount deposited in capital gain account under capital gain account scheme is taxable?
Yes, there are specific bonds available under the Income Tax Act that allow you to invest your capital gains and claim tax relief. One of the primary avenues is provided under Section 54EC of the Act. How It Works: Section 54EC Bonds:If you have incurred capital gains from the sale of an asset, youRead more
Yes, there are specific bonds available under the Income Tax Act that allow you to invest your capital gains and claim tax relief. One of the primary avenues is provided under Section 54EC of the Act.
How It Works:
Section 54EC Bonds:
If you have incurred capital gains from the sale of an asset, you can invest those gains in specified bonds—such as those issued by the National Highways Authority of India (NHAI) or the Rural Electrification Corporation (REC).
Tax Exemption:
By investing in these bonds, you can claim an exemption from capital gains tax on the invested amount, up to a certain limit (currently ₹50 lakh per financial year).
Holding Period:
These bonds are non-convertible and must be held for a minimum period, usually three years, to avail the tax benefit.
Key Points to Remember:
Investment Limit:
The exemption is available up to the prescribed limit per financial year.
Purpose:
This measure encourages the flow of capital into infrastructure and other government-promoted sectors.
No Other Eligible Bonds:
While Section 54EC is the most common route for capital gains bonds, always review the latest provisions, as tax laws can evolve.
By investing your capital gains in these bonds, not only do you help fund critical infrastructure projects, but you also reduce your tax liability. This strategy can be an effective way to manage your taxes while supporting national development initiatives.
See lessWhether interest received on amount deposited in capital gain account under capital gain account scheme is taxable?
Yes, the interest earned on amounts deposited in a Capital Gains Account under the Capital Gains Account Scheme (CGAS) is taxable. This interest income is subject to tax in the year it accrues, irrespective of whether the funds are withdrawn. Tax Deducted at Source (TDS) is applicable to this interRead more
Yes, the interest earned on amounts deposited in a Capital Gains Account under the Capital Gains Account Scheme (CGAS) is taxable. This interest income is subject to tax in the year it accrues, irrespective of whether the funds are withdrawn. Tax Deducted at Source (TDS) is applicable to this interest, and the depositor receives a TDS certificate for the amount deducted
See lessWhich Form is to be filed for withdrawal from Capital Gain Account?
When you deposit your capital gains into a Capital Gains Account Scheme (CGAS) to claim an exemption under sections like 54, 54F, or 54EC, you may later need to withdraw funds from this account when you actually make the required investment. Key Point:There is no distinct, numbered form prescribed iRead more
When you deposit your capital gains into a Capital Gains Account Scheme (CGAS) to claim an exemption under sections like 54, 54F, or 54EC, you may later need to withdraw funds from this account when you actually make the required investment.
Key Point:
There is no distinct, numbered form prescribed in the Income Tax Act specifically for the withdrawal of funds from a Capital Gains Account. Instead, the process is carried out online.
How It Works:
Online Application:
You are required to log in to the official Income Tax e-filing portal where the Capital Gains Account Scheme is managed.
Within this online module, you will find an option to submit a withdrawal request.
You need to furnish the necessary details, such as the amount you intend to withdraw and the purpose of the withdrawal (for example, for acquiring a new asset to claim an exemption).
Supporting Documents:
Along with your online request, you must upload or submit the relevant documents, such as evidence of the intended investment. This ensures that the withdrawal is used in accordance with the provisions of the Act.
Approval Process:
Once your request is submitted, the authorities will process it. On approval, the funds will be released from the Capital Gains Account and can be used to make the qualifying investment.
Bottom Line:
There isn’t a separate “Form 10D” or similar for withdrawing funds. Instead, you complete a withdrawal application through the online Capital Gains Account Scheme portal on the Income Tax e-filing website. This streamlined process is designed to facilitate the smooth utilization of your capital gains for eligible investments.
See lessIs TDS applicable on DMATE opening Charges? What is the section and rate?
TDS is NOT applicable on Demat account opening charges because they are in the nature of bank charges or service charges, which do not fall under any specific TDS provision. Such charges are generally considered as a payment for services, and TDS is applicable only if the payment falls under a speciRead more
TDS is NOT applicable on Demat account opening charges because they are in the nature of bank charges or service charges, which do not fall under any specific TDS provision.
Such charges are generally considered as a payment for services, and TDS is applicable only if the payment falls under a specific section of the Income Tax Act.
Since Demat account opening charges are generally not categorized as professional fees, commission, or contractual payment, TDS is NOT required to be deducted under the Income Tax Act.
See lessWhen E way bill is not required?
As per Rule 138 of the CGST Rules, 2017, an E-Way Bill is NOT required in the following cases: Goods Value Below ₹50,000 (Rule 138(1)) If the value of goods (excluding GST) being transported is less than ₹50,000. Transport by Non-Motorized Vehicles (Rule 138(14)(a)) No E-Way Bill is required if goodRead more
As per Rule 138 of the CGST Rules, 2017, an E-Way Bill is NOT required in the following cases:
These provisions ensure that small-value shipments, government-regulated goods, and special cases like customs and defense-related movements are exempt from the E-Way Bill requirement.
See lessWhen Ind AS are applicable?
Ind AS applies based on company size and listing status. 1. Mandatory Applicability: From April 1, 2016 → Listed & unlisted companies with net worth ₹500 crore+. From April 1, 2017 → All listed companies & unlisted companies with net worth ₹250 crore+. From April 1, 2018 → Banks, NBFCs &Read more
Ind AS applies based on company size and listing status.
1. Mandatory Applicability:
2. Voluntary Adoption:
3. Not Required for:
Net Worth = (Paid-up Share Capital) + (Reserves & Surplus) – (Accumulated Losses) – (Deferred Expenditure Not Written Off)
See lessIs TDs deductible on Certification charges?
TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc. Here is the detailed analysis of sec 194 J TDS under section 194J is deducted on payments exceeding the threshold limRead more
TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc.
Here is the detailed analysis of sec 194 J
TDS under section 194J is deducted on payments exceeding the threshold limit for below payments.
Professional services include following services:
Fees for technical services include the following payments:
Note: Technical service does not include services provided by machines or robots.
Royalty means the payment made for:
Non-compete fees include the payment made for an agreement for not sharing any license, patent, trademark, franchise, know-how, commercial or business rights, or information to any other person for processing, manufacture, or provisional service.
Thanks
See less