I am a senior citizen. I sold a plot five years ago and invested the proceeds in capital gains account. After three years, the income tax there was calculated and paid as per my tax slab. The deposit is continued in the capital gains account. Please advise regarding the procedure to withdraw the amount.

N.R. Karunakaran

The government offers tax relief to individuals who deposit their capital gains, within a specified time period, under the Capital Gains Account Scheme. And this will be eligible for capital gain exemption. 

Two types of deposits can be made under the Capital Gains Account Scheme, as explained below:

(i) Type A account

- This is similar to a regular savings account and passbook will be issued to the deposit holder.

- This offers better liquidity and withdrawals can be made at any time

(ii) Type B account

- This is similar to a fixed deposit account and the maximum allowed period of deposit is three years.

Withdrawal

- As mentioned above, there are no restrictions on withdrawal from type A - savings account.

- Withdrawal from type B account is allowed only after transferring the amount to type A account

- Any amount withdrawn if not utilised for making specific investments will attract capital gains tax liability. 

- Form C is required to be submitted for withdrawal from an account for the first time and form D for subsequent withdrawal providing details of the manner of utilisation of money withdrawn earlier.

The author is Partner, Deloitte India

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