Question ID :
CGAS and issuance of certificate by CA
My query is on LTCG, A person has sold a Plot in September 2020 and there is a long term capital gain. He has already entered into an ‘Agreement to sell ‘ with a seller to purchase a new residential property in Jan 2020, which he can claim exemption under 54F. But the possession of the same will be in Dec 2023 (4years after agreement to sell) when construction is complete. He wants to put unutilized amount in CGAS and make payment to the seller directly from that account, frequency of payment to seller is once in 3 months.
Please clarify the following:
1. Can he enjoy exemption under 54F by depositing the money in CGAS even though agreement was entered into to purchase the property ( 3 years is only for construction and not for purchase) and property is ready for possession after Dec 2023 ?
2. If yes, does he have time to utilize CGA amount till Aug 2023 (3 years from the date of transfer) ?
3. To open CG account with bank, bank is asking for certificate of computation of capital gain. Can CA issue that based on the details and document provided by him ? Agreement to sell also mentions some other approximate expenses/fees/taxes which have to be added to the purchase cost while computing net capital gain. As CAs cannot certify anything based on the estimated figure, how to deal with it ? Please clarify ?
Mallika K R
Nov 28 2020 12:00AM