How to Close Capital Gain Account?

I know how to close capital gain account scheme as my uncle closed his account a few months ago. Let me tell you about this account in brief first.

If you are claiming Capital Gains Exemption, you have to deposit the money in a Capital Gains Account before the due date of ITR’s filing.

For instance: Maya sold a residential house in January 2022 and she wants to claim capital gains exemption by buying a new residential property. To claim the capital gains exemption, she needs to buy a new residential property within two years i.e. before January 2024. However, the due date of filing of ITR for the F.Y. 2021-2022 is 31st July 2022 and the gains arising on the property’s sale need to be reported in the ITR.

In such cases, the government specifies that the amount to be reinvested be deposited in a Capital Gains Account before the ITR filing. The seller isn’t required to deposit the money in the Capital Gains Account immediately and she can do so at any time before the ITR filing’s due date i.e. before 30th September for audit cases and before 31st July for non-audit cases.

She’d be able to save the 20 percent Long Term Capital Gains Tax by claiming this Capital Gains Exemption.

Finally, when the construction has been finished or the house has been bought and now the taxpayer wishes to close his Capital Gains Account Scheme, they are required to make an application with the assessing officer’s approval.

An application in Form G needs to be made to close the Capital Gains Account. In case of the depositor’s death, such an application will have to be made by the legal heirs/nominee in Form H.

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Wondering

how to close capital gain account after 3 years

? Here's how you can close such an account.

What is the Capital Gain Account Closure Procedure?

• Firstly, ensure that all funds in the Capital Gains Account are withdrawn. These funds typically consist of the amount deposited under Section 54 or Section 54F of the Income Tax Act, 1961, to avail of exemptions on capital gains tax.

• Visit the bank where the Capital Gains Account is held and submit a closure of capital gain account request. You may need to fill out a form provided by the bank for this purpose.

• Along with the closure request form, you might be required to submit supporting documents, which could include:

1. Original passbook or account statement.

2. Identification proof, such as PAN card, Aadhaar card, passport, or voter ID.

3. Proof of address, such as utility bills, rent agreement, or Aadhaar card.

• Ensure that all dues, if any, are cleared before closing the account. This could include outstanding fees, charges, or penalties levied by the bank.

• Once the closure request is processed, the bank will provide an acknowledgment or confirmation of the closure. Keep this document for your records.

• After closing the Capital Gains Account, make sure to update your financial records accordingly. This includes updating your tax records and keeping track of any tax implications, if applicable.

• In case of any delays or issues with the closure process, follow up with the bank to ensure that the capital gain closure procedure is done satisfactorily.

• Some banks may issue a closure certificate or statement confirming the closure of the Capital Gains Account. This document can be useful for future reference or tax-related purposes.

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how to close capital gain account after 3 years

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