“I had deposited Rs. 3 lakh in Capital Gains Account (CGA) Scheme out of the capital gains of Rs. 3.88 lakh with no tax payable in view of my exemption limit. I am, however, unable to find any residential property with the amount in my command. I wish to withdraw the amount before the three year period and pay tax. The bank is not aware of what they are required to do under the circumstance.”
The CGA Scheme provides for drawing the amount for application for purchase or construction of a residential property on a declaration given by the account holder. The amount is bound to be returned at the end of three years, if it is not drawn for the purpose for which it was so deposited. It becomes taxable in the year of withdrawal. It should be possible for a person to withdraw the amount even before the three year period, when he understands that he will not be able to avail himself of the benefit. If he then seeks to close the account, it can be done only with the approval of the assessing officer as provided in Clause 13 of the Scheme on application in Form G available in the annexure to the Scheme. The amount can then be withdrawn on deposit of Form G with the bank with consequent liability for capital gains tax.