Capital Grant Scheme

The Capital Gain Scheme was introduced in the year 1988, and as per the Capital Gains Account Scheme the amount of capital gains to be claimed as an exemption should be either be re-invested or deposited in the Capital Gains Account before the due date of filing of returns. The Govt. has notified 28 banks which open the Capital Gain Account on behalf of the Govt. All branches of these 28 banks except Rural Branches are authorized to open capital gains account. Individuals and members of HUF (Hindu Undivided Family) can benefit from Capital Gains Account scheme (CGAS). Basically, all those taxpayers who want to buy or construct a residential property to save income tax can benefit from CGAS 1988. If any investment with respect to purchase of a property is made within two years from the date of sale of a property, the taxpayer can save on tax on capital gain.
Taxpayers can avail exemptions under the CGAS only when the amount of capital gain, or net consideration, is deposited by the last date for filing the income tax return.

There are 2 categories of CGAS which are as follows:

1. Capital Gain Account-Type A-Saving A/c: This is like a normal savings account and interest payable on this account is the same as the interest paid on normal savings account.

2. Capital Gain Account-Type B-Term Deposit A/c: This is type of fixed deposit account where amount is deposited for fixed time.

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