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I sold my flat on 30 November 2021 by registering an agreement to sell. I received balance sales proceeds after 3 months as the buyer had a bank loan and disbursal is done after 3 months. What is the time limit for me to pay capital gains tax? Should I have paid in the same financial year i.e. 2021-22 or within six months of registering agreement to sale or completing full transaction? Also, till I don’t pay capital gains tax, can the amount be kept in my savings account? - Jagadish Shah

Any transfer of a capital asset in any financial year shall be taxable in the hands of the taxpayer only in that financial year in which such transfer took place. Further, where a taxpayer intends to avail exemption under section 54 of the Income-tax Act for the purchase of another residential property, they may invest the amount of capital gain within 2 years of the sale of old property. If the taxpayer is not able to invest the capital gain till the time of filing of tax return, then the amount needs to be deposited in the Capital Gain Account Scheme.

Hence, in your case since the agreement is registered in November, the capital gain arising in this case would be taxable in the FY 2021-22 and you were required to pay advance tax thereon in the December instalment due on 15 December 2021 and in the March instalment which was due on 15 March 2022. The entire transaction needs to be reported in the income-tax return, which is due by 31 July, 2022, unless extended.

Please note that the same deadline i.e. 31 July, 2022 would apply for transfer of the amount from your savings account to the Capital Gains Account.

This query is answered by Amit Maheshwari, Tax Partner, AKM Global, a tax and consulting firm. Send you personal finance queries at mintmoney@livemint.com to get them answered by experts.

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