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Image CAPITAL GAIN SCHEME

Government of India, Ministry of Finance have formulated a scheme called “Capital Gain Account Scheme 1988” whereby the tax payers can avail of the benefit of exemption from Capital Gains, if the amount of Capital Gains or the net consideration is deposited in the public sector bank on or before the due date of filling a return of income by the tax payers.

Features:

Eligibility

Assesses who are eligible for exemption under section 54, 54B, 54D, 54F, or 54G of the income tax act 1961. (Depositors themselves have to verify whether the scheme applies to them or not).
Can be opened in any branch other than rural branch.

Scheme Code

TD007 - Capital Gain DRIC
TD008 - Capital Gain FDR

Scheme Details

Under this scheme, the tax payers can avail of the benefit of exemption from Capital Gains, if the amount of Capital Gains or the net consideration is deposited in the bank on or before the due date of filling the return of income.

Type Of Accounts

Two types of deposit accounts can be opened under this Scheme. Deposit Account – A (i.e. Saving bank account),
Deposit account -B (i.e. term deposit accounts).
 Rules applicable to saving and term deposit accounts are
 applicable to these accounts also.
Deposit made under this account will be in the form of Term
 Deposits, with an option to retain the deposit either as "cumulative" i.e. similar to DRC Deposit [with interest reinvested] or as non-cumulative i.e. similar to Fixed Deposit.

Period of Deposit

Not exceeding 2 to 3 years from the date of transfer of original asset as given below
Max 24 months - if capital gains is U/s 54, 54B, 54 F.    (As declared in Form A by depositor)
Max 36 months - if capital gains is U/s 54, 54 D, 54 F, 54 G & 54GB
 (As declared in Form A by depositor)

Minimum  Deposit Amount

Rs. 1,000 in case of Capital Gains Term Deposits

Maximum Deposit Amount

No upper ceiling for Maximum Balance/Amount

TDS

TDS will be deducted as per guidelines.

Rate of Interest

Prevailing term deposit interest as per tenure

Interest payment Frequency

Will be paid on quarterly or half yearly interval as per
the choice of the customer if the deposit is opened in
FDR scheme.
In case the account is opened in DRIC scheme interest is
 paid on maturity along with principal amount.

Loan Facility

Not available

Nomination

Available as per guidelines

Automatic Renewal

Not allowed

Premature Closure /Closure of account

Closure of Term Deposit allowed before maturity. (Proceeds to
 be credited to Cap Gains SB account-Account- A only).
At the time of closure of all accounts, the depositor will have
 to produce specific authority letter/ certificate from the Income Tax Officer of the respective jurisdiction. The closure would be allowed on the terms mentioned in the letter of authority.

Penalty on Premature Closure

In case of Pre-closure of retail term deposits (less than Rs.2.00 crores), which have run for 7 days or above, interest to be paid at 1.00% less than the applicable rate (as on the date of opening of deposit) for the period for which it has actually remained with the Bank or contracted rate, whichever is lower.


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