Sorry!Capital Gains Account Scheme can’t be used for purchasing Bonds.
November 17, 2006 by taxworry · Leave a Comment
Someone Asked on This Blog
What are bonds that are open right now for investment to save capital gains tax ? If there are no bonds issue this fiscal year, what do people who have transferred the asset-land in my case- in this year do ? Will they get extension of time ? Can the money be invested in a capital gains account of any bank till the time when such bonds issue opens ?
kuttimukund@……com
kuttimukund@……com
Right Now there are no bonds in the market , either by NHAI or RECL -the two bonds specified under Section 54EC .These were issued somewhere in July 06.
For people who have got capital gains on land this year, there are only two options left for them :
1. they can wait up to SIX months to see if any bonds are issued by these two institutions.
2.If no bonds are issued , then only way to save on LTCG tax , is section 54F
In that case, buy another house within two years from the date of transfer or construct the house within three years. As per section 54F , you are allowed to deposit the untilised amount in Capital Gains Account Scheme within due date of filing Return of Income. Only thing to remind you that if you have two residential houses already , you can not get exemption u/s 54F . In that case , there is no alternative but to wait for six months to see if any bonds have been issued by NHAI or RECL .
No ,Capital Gains Account Scheme can not be utilised to park the gains and used for purchasing the Bonds issued by NHAI or RECL ,simply because Section 54EC does not contains such provision.
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