Capital GainsDeposit in CGAS Taxability in hands of legal heir

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The Tax Publishers Capital Gains--Deposit in CGAS--Taxability in hands of legal heir Query Facts: -- Mr. A purchased a site for approx. Rs. 65000 in December 2001. -- He sold the property in May 2018 for Rs. 15 lakhs. -- The total amount of 15 lakhs was deposited in Capital gains accounts scheme in State Bank of India in May 2018 -- Mr. A passed away in October 2020. -- No house was purchased nor was a house constructed. -- 3 years completed in May 2021. Clarification required 1. Is the 15 lakhs taxable after the death of the assessee ? Does the 15 Lakhs have to be shown as income of Mr. A for the financial year 2021-22 ? 2. Is any clearance required from the Income tax department for withdrawal of the amount by the legal heirs ? 3. What is the procedure to be followed for withdrawal of the amount by the legal heirs ? Reply 1. On the issue whether unutilised deposits under the Capital Gains Accounts Scheme will be taxable in the hands of the legal heirs of the assessee, the CBDT vide its Circular No. 743, dated 6-5-1996 has clarified that such unutilised deposit will not be taxable in the hands of the heirs of the assessee. The above circular is reproduced hereunder : SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Capital Gains--Deposit in CGAS--Taxability in hands of legal heir

Query

Facts:

-- Mr. A purchased a site for approx. Rs. 65000 in December 2001.

-- He sold the property in May 2018 for Rs. 15 lakhs.

-- The total amount of 15 lakhs was deposited in Capital gains accounts scheme in State Bank of India in May 2018

-- Mr. A passed away in October 2020.

-- No house was purchased nor was a house constructed.

-- 3 years completed in May 2021.

Clarification required

1. Is the 15 lakhs taxable after the death of the assessee ? Does the 15 Lakhs have to be shown as income of Mr. A for the financial year 2021-22 ?

2. Is any clearance required from the Income tax department for withdrawal of the amount by the legal heirs ?

3. What is the procedure to be followed for withdrawal of the amount by the legal heirs ?

Reply

1. On the issue whether unutilised deposits under the Capital Gains Accounts Scheme will be taxable in the hands of the legal heirs of the assessee, the CBDT vide its Circular No. 743, dated 6-5-1996 has clarified that such unutilised deposit will not be taxable in the hands of the heirs of the assessee. The above circular is reproduced hereunder :