Withdrawal of funds from Capital Gain Account Scheme

Income Tax Income from Capital Gains
1

Hello,

I need your help to understand the withdrawal process from CGAS.

I have some amount in a CGAS account. I plan to use the same towards the purchase of a house.

I know I can fill Form C to withdraw funds for the house. But, after this also, there will be some funds left in the account. I want to know how I can withdraw these -

  1. Can i withdraw some amount (few lacs) in Cash to pay for services like Registration, Stamp duty, renovation and so on. Do I need to show any proofs to the bank?

  2. Can i transfer the remaining unused funds plus the interest amount to my savings account? And pay tax on this later on during ITR filing.

Thank you.

@Shrutika_Shah any help here would be appreciated.

2

Hi @Nyk

There are two types of deposits that can be made under the capital gains account scheme.
Type A: Savings Deposit
Type B: Term Deposit

With respect to withdrawals, just like a savings deposit, (Type A) account offers better liquidity, and withdrawals can be made at any time.
On the other hand, if a withdrawal from a term deposit account is desired, the depositor must first request for conversion to a savings account. (There might be some penalty for the pre-mature withdrawal.)

Yes, as correctly mentioned by you, Form C shall be submitted for withdrawal from an account for the first time and Form D for subsequent withdrawal providing details of the manner of utilization of money withdrawn earlier.

  1. Withdrawal from Type A in cash is not allowed if the amount is exceeding ₹25,000 in aggregate.
    Where the withdrawal amount exceeds Rs. 25,000, payment should be made only by crossed-demand draft/cheque bankers in favour of the person to whom the depositor desires to make payment.
    The bank may ask for the house property documents.

  2. The unutilized funds will be taxable under “Income from capital gains” at the applicable slab rate. The interest income is taxable under “Income from other sources”.

3

Thank you for the response @Shrutika_Shah

My deposits are present in the Type A account.

Also, if I can’t withdraw more than 25k in cash, then how shall I pay for the services? Everywhere cash is needed even for registration/stamp duty. Shall I transfer everything Unutilized into my savings account and then withdraw from there to pay for these services? And do I need to show any proofs to make this transfer like NOC from ITD?

Thank you.