Capital gains are profits that an individual earns from the sale or transfer of any capital assets including property – movable or immovable, tangible or intangible. Residential properties, land plots, buildings, equity shares, automobiles, gold etc come under capital assets. If you earn a profit on selling any of these assets, it attracts a tax under the income head of ‘capital gains’.
Many banks offer investment schemes that can help an individual save taxes on their capital gains. State Bank of India’s SBI Capgains Plus (Capital Gain Scheme 1988) is one such scheme.
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Since an individual becomes liable for paying Long Term Capital Gains Tax on the sale of a property, one can save taxes by re-investing the amount for another residential property or any other specified asset within the stipulated time frame. So, if you have not selected that alternative investment for tax savings, then you can park the money in SBI’s CapGains Plus account under the Capital Gains Account Scheme, 1988 and become eligible to claim exemption of Long Term Capital Gains Tax on the sale of Capital Assets.
SBI Capital Gain Plus Account Eligibility
If you are a resident individual or body of individuals then you can open this SBI account. Other persons/entities eligible for opening the account are:
* Non-individuals like Hindu Undivided Family (HUF), Sole Proprietorship firms; Partnership firms, Companies, Association of persons etc.
* Non-resident Indians (NRIs)
* Resident but not Ordinary Resident (RNOR)
* Artificial Judicial persons who have capital gains, taxable in India.
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Features of the SBI Capital Gain Plus Account
* No upper ceiling for Maximum Balance/Amount
* As applicable to normal Savings Bank account and/or Term Deposits for respective maturities of Retail & Bulk deposits. No additional interest rate benefits for Senior Citizens or Staff.
* The Capital Gains Deposit Scheme is operative at all branches except Rural branches.
* Closure of TDR/STDR (Account – B) allowed before maturity. (Proceeds to be credited to CapGains SB account-Account- A only).
* Only SBI customers can open this account. In case you are not an SBI customer, you need to first open the account and then submit the application form for CapGains Plus.
* Nomination facility is available for the deposits (Up to 3 Nominees can be nominated)
* Account can be transferred from one branch to another branch
* Period of Deposit: Not exceeding 2 to 3 years from the date of transfer of original asset
— Max 24 months – if capital gains is U/s 54, 54B, 54 F.
— Max 36 months – if capital gains is U/s 54, 54 D, 54 F, 54 G & 54GB.
However, one should be aware that at the time of closure of the account, the depositor will have to produce a specific authority letter/ certificate from the Income Tax Officer of the respective jurisdiction.
Also, be mindful that the SBI doesn’t allow any loan facility against this deposit. Also, once the amount deposited under SBI CapGains Plus matures, the proceeds will be credited into the Savings Bank Account opened under SBI CapGains Plus.
