Capital Gains Account Scheme (CGAS)

 

The Capital Gains Account Scheme (CGAS) is a special facility under the Income Tax Act that allows taxpayers to temporarily park their capital gains when they are unable to reinvest them before the due date of filing their income tax return. It ensures that individuals and HUFs can still claim exemptions under sections like 54, 54B, and 54F by depositing the required amount into a designated bank account. The deposited funds must then be utilized within the statutory period (two years for purchase, three years for construction, or two years for agricultural land). If the amount remains unutilized after the deadline, it automatically becomes taxable as long‑term capital gain in the year of expiry. In essence, CGAS acts as a compliance cushion—helping genuine taxpayers preserve their exemption eligibility while preventing misuse by ensuring eventual taxation of unspent balances.

1. Capital Gains Account Scheme (CGAS) Basics

• Deposit requirement:
• Section 54, 54B → deposit capital gain.
• Section 54F → deposit net sale consideration.
• Opening: directly at bank (no AO approval).
• Closure: requires AO approval.

2. Taxability of Unutilized Amount

• If not utilized within 2–3 years:
• Becomes taxable in the year of expiry.
• Taxed as long-term capital gain (nature preserved).
• CGAS is a compliance cushion, not a loophole. Wrong intent only defers tax, cannot avoid it permanently.

3. AO’s Role

• AO may deny closure temporarily if reinvestment proof is missing or period not expired.
• Ultimately closure is allowed, with taxation of unutilized balance.
• Application is offline (formal request + documents). Online submission possible only if AO allows via e-Proceedings.

4. Case Study

• Sale: 03-01-2026, ₹1.5 crore.
• Purchase: 10-07-1999, ₹20 lakh.
• Eligible for FMV substitution as on 01-04-2001.
• Indexed cost (if FMV ₹30 lakh): ≈ ₹1.09 crore.
• LTCG ≈ ₹41 lakh.
• Deposit unutilized LTCG in CGAS by ITR due date (31-07-2026 / 31-10-2026).
• Reinvestment deadline:

• Purchase → by 02-01-2028.
• Construction → by 02-01-2029.

5. Tax Rate Update (Budget 2024)

• LTCG on property:
• 12.5% flat (no indexation) OR
• 20% with indexation.
• Taxpayer can choose whichever is beneficial.
• Applies under both old and new regimes (regime-neutral).

6. Sections 54, 54B, 54F – Scope

• Section 54: Sale of residential house → reinvest in residential house.
• Section 54B: Sale of agricultural land → reinvest in agricultural land.
• Section 54F: Sale of any other long-term asset (not house) → reinvest in residential house.

7. Capital Gain vs. Net Sale Consideration

• Net Sale Consideration: Sale proceeds minus transfer expenses.
• Capital Gain: Net sale consideration minus indexed cost & improvements.
• Exemption rules differ:

• Section 54/54B → deposit capital gain.
• Section 54F → deposit net sale consideration.

 

Example:

• Sale price: ₹1,00,00,000
• Transfer expenses: ₹2,00,000 → Net Sale Consideration = ₹98,00,000
• Indexed cost: ₹62,05,000 → Capital Gain = ₹35,95,000
• For Section 54F → deposit ₹98,00,000.
• For Section 54 → deposit ₹35,95,000.

 

 

GST 80% Rule in Real Estate Sector – Summary Guide

 

1. Overview of the 80% Rule

·        Promoters must procure at least 80% of taxable inputs and services from registered suppliers annually, project-wise.

·        If shortfall exists, RCM (Reverse Charge Mechanism) applies on the shortfall.

·        Cement from unregistered suppliers is always liable under RCM (earlier 28%, now 18% under GST 2.0).

2. Calculation Basis

·        The rule is applied annually, project-wise, not monthly.

·        Shortfall is determined at year-end, and RCM is payable by June of the following year.

3. Treatment of Non-GST/Exempt Items

·        Non-GST supplies (e.g., electricity, petrol, diesel, alcohol) and exempt supplies (e.g., health, education, agricultural produce) are excluded from the 80% calculation.

·        Salary and wages are excluded as they are not considered supplies under GST.

4. Special Cement Rule

·        Any cement purchased from unregistered suppliers is always taxed under RCM.

·        To avoid RCM liability on cement, builders must procure 100% cement from registered suppliers.

5. Adjustment of Shortfall

·        If overall registered procurement is less than 80%, the shortfall is first adjusted against cement if unregistered cement exceeds 20%.

·        If not, the shortfall is adjusted against other taxable inputs/services.

6. Composition Dealers

·        Purchases from composition dealers count as registered for the 80% rule.

·        However, no Input Tax Credit (ITC) is available on such purchases.

·        These purchases help meet the threshold but should be flagged separately.

7. Key Takeaways

·        Annual, project-wise compliance is required.

·        No item-wise 80% test is needed, except for the cement carve-out.

·        Cement from unregistered suppliers always attracts RCM.

·        Composition dealers count as registered but ITC is not available.

8. Applicability to Commercial Real Estate

- The 80% rule applies only to residential real estate projects under concessional GST rates (1%/5%).

- Commercial projects (offices, malls, shops, warehouses) are not covered under the 80% rule.

- Commercial projects continue under normal GST rates with ITC available.

9. GST Rates for Commercial Real Estate

- 12% GST: Sale of under-construction commercial property (shops, offices, warehouses) with ITC available.

- 18% GST: Renting/leasing of commercial property (shops, offices, warehouses) with ITC available.

- 0% GST: Sale of completed/ready-to-move commercial property (only stamp duty/registration applies).

- Sale of land: Exempt from GST.

Comprehensive Summary of GST E-Invoicing Applicability

 

1. General Applicability of E-Invoicing under GST

E-invoicing under GST is governed by Rule 48(4) of the CGST Rules, 2017. It mandates certain registered taxpayers to generate invoices through the Invoice Registration Portal (IRP).

·        Key Points:

·        • Applicable to businesses with aggregate turnover of ₹5 crore or more in any financial year from 2017–18 onwards.

·        • Covers B2B transactions, exports, and credit/debit notes.

·        • Not applicable to B2C invoices or exempted entities.

·        Exemptions include:

·        • Banks, insurers, NBFCs, and financial institutions

·        • Goods Transport Agencies (GTA)

·        • SEZ units (not developers)

·        • Government departments and local authorities

·        • Passenger transport services and cinema admissions

2. Example Case: Business Starting in 2023–24

Turnover progression:

·        • FY 2023–24: ₹2 crore

·        • FY 2024–25: ₹3 crore

·        • FY 2025–26: Exceeds ₹5 crore

Conclusion: Since the turnover exceeds ₹5 crore in FY 2025–26, e-invoicing becomes applicable from FY 2026–27 (as the threshold is based on any preceding financial year).

3. Key Notifications & Circulars

Notifications:

·        • Notification No. 13/2020 – Central Tax: Introduced e-invoicing for turnover ≥ ₹100 crore from 1 Oct 2020.

·        • Notification No. 61/2020 – Central Tax: Deferred implementation to 1 Oct 2020.

·        • Notification No. 70/2020 – Central Tax: Reduced threshold to ₹500 crore.

·        • Notification No. 88/2020 – Central Tax: Reduced threshold to ₹100 crore.

·        • Notification No. 05/2021 – Central Tax: Reduced threshold to ₹50 crore.

·        • Notification No. 17/2022 – Central Tax: Reduced threshold to ₹10 crore.

·        • Notification No. 10/2023 – Central Tax: Current threshold ₹5 crore from 1 Aug 2023.

Circulars:

·        • Circular No. 186/18/2022-GST: Clarified applicability for government departments registered for TDS.

·        • Circular No. 198/10/2023-GST: Clarified scope of Rule 48(4) and exemptions.

4. Chronology of E-Invoicing Notifications

Notification No.	Date	Threshold & Applicability
13/2020 – Central Tax	21 Mar 2020	Introduced e-invoicing for turnover ≥ ₹100 crore from 1 Oct 2020
61/2020 – Central Tax	30 Jul 2020	Deferred implementation to 1 Oct 2020
70/2020 – Central Tax	30 Sep 2020	Reduced threshold to ₹500 crore
88/2020 – Central Tax	10 Nov 2020	Reduced threshold to ₹100 crore
05/2021 – Central Tax	8 Mar 2021	Reduced threshold to ₹50 crore
17/2022 – Central Tax	1 Aug 2022	Reduced threshold to ₹10 crore
10/2023 – Central Tax	10 May 2023	Reduced threshold to ₹5 crore from 1 Aug 2023

5. Clarified Scope of Rule 48(4) and Exemptions

Rule 48(4) mandates notified taxpayers to generate invoices through the IRP for B2B supplies, exports, and credit/debit notes.

·        Exemptions include:

·        • Government departments registered only for TDS under GST (Section 51)

·        • Banks, insurers, NBFCs, and financial institutions

·        • SEZ units (not developers)

·        • Goods Transport Agencies (GTA)

·        • Passenger transport services

·        • Admission to cinema halls

6. Practical Takeaways for Businesses and Government Departments

·        • E-invoicing applies to registered persons with turnover exceeding ₹5 crore in any financial year since 2017–18.

·        • Applies to B2B transactions, exports, and credit/debit notes only.

·        • B2C transactions are excluded.

·        • Government departments registered only for TDS are exempt.

·        • Exemptions also apply to banks, insurers, NBFCs, SEZ units, GTA, passenger transport, and cinema admissions.

1st Child and Mother connection through Astrology

Divine Connection Between Mother & her Child

By applying this simple example any mother can easily verify that how her 1^st child is already decided in advance. The data needed is the DOB, TIME & PLACE of Birth of MOTHER and 1^st Child. Please note this principle not applicable to FATHER Chart.

Formula:

Whenever  RAHU or KETU (i.e.) DNA hit the 5^th House/5^th Lord of Mother there is a possibility of Birth of 1^st Child of that Mother.

Disclaimer:

I am not an astrologer and neither advocating it. I am just sharing an information which may be helpful to lots of mothers and sisters. Just for thought and analysis and data collection. I am in no way preaching astrology.

Basic understanding

Who will take birth and when and to which mother is already decided and let’s collect data and see if some exception exists or not.

Mother is the gate way of the creator, what the creator wants it is the mother who delivers it and father is the heritage i.e. the source of the creation.

The whole living being is the combination of MIND+SOUL+BODY+DNA

Everything that creates is the mother including the “mind” which we call MOON in astrology.

Everything that is created has some energy or source including the “Soul” which we call SUN in astrology.

Every creation is observed through the “body” which we call “Earth” in astrology.

The movement of SUN+EARTH+MOON creates two intersection points one is RAHU and other is KETU. If we analyse the movement deeply, we will be able to understand that EARTH is moving like similar to DNA structure.

Short form of planets  Su- Sun, Ma- Mars, Ve- Venus, Me- Mercury, Mo- Moon, Ke- Ketu, Ju- Jupiter, Sa-Saturn, Ra- Rahu

Example:

Put DOB, TIME & PLACE of Birth of MOTHER in any online Kundli software and download lagna kundli like bellow

Chart of Mother

From (Mother Chart) Note down the coloured house and number mentioned therein like here it is – 6

Refer the Rasi And Their Lords Table from above and find the planet corresponding to Sl No-6, it is Mercury

 

In your chart the house may have any number written therein, just locate the number and find the planet name against that number from the Table.

 

So, we have two things from Mother chart:

1-     We have a Number – 6

2-     We have a planet - Mercury

  

Put DOB, TIME & PLACE of Birth of 1^st Child in any online Kundli software and download lagna kundli like bellow

First Child Chart

From (1^st Child Chart) note down (Ke) and (Ra) and connect them with an arrow like above

 Note: “Ke” and “ Ra” may be anywhere in the chart of the child table just locate it and connect by an arrow.

Lets apply the formula:

“Ke” OR “ Ra” in CHILD chart must hit the planet or the number as identified in the MOTHER chart.

In the above example the “Ke” in the child chart hit the number “6”

Simply means the Child carries the DNA (i.e. KETU +RAHU) of Mother

 

Exception:

If someone finds her child chart Ke or Ra not hitting the  Number or Planet of the mother then just change the Month of the birth of CHILD to 3 months earlier and 3 Months later and recheck the applicability. Ex. DOB of child is 10-5-2025, change it to 10-2-2025 and 10-8-25 and check again. This is exception and has some reason to it.

 

Please apply it and let me know how many cases are matching and how many cases are not matching. 

TAX Base as per IND AS-12

 Please find the bellow link to download the PDF file

TAX Base as per IND AS-12

Suggestion That can change the Assurance Services Future

 

Idea to Change the shape of the CA profession with respect to assurance services

Disclaimer: The idea will not be acceptable to the established and well reputed CA firms and Chartered Accountants

 

Objectives:

1.       Increasing the real level of Independence

2.       Eliminating back-end solicitation

3.       Equal Opportunity to every Chartered Accountant

4.       Uniform Audit Pricing with no scope for undercutting

5.       Better reporting and statutory compliance

6.       Establishing the reputation of the profession

Method to be used for Auditor Appointment:

Blind Appointment Method where neither the auditor or the appointor does not know each other till the appointment materializes.

 

Procedure to apply the method:

1.      Website: Create a website for appointment of statutory auditors for all audits mentioned in any Act like companies act, income tax act, gst act etc.

2.      Database of Auditors: Maintain a database of the Auditors in that website. The data may be extracted from the MEF

3.       Application by the Appointor for appointment of auditor:

a.      Any person requiring an auditor should require to submit a request for such appointment within a given time period. The time period may be different for each type of audit or based on the category of the Appointor.

b.      Fine should be levied on the Appointor if it fails to submit request within a given period.

c.       The Appointor should provide its various address throughout the world in that form

d.      The Appointor should mention its important financial information like Revenue, Profit, Stock, Fixed Assets, Net worth etc. in that form

e.      The Appointor should mention one unique thing to differentiate it from others like PAN, CIN etc.

f.   The appointor should mention the MRN/FRN of the Chartered Accounts who are already associated with the appointor so as to exclude those Chartered Accountants as auditor of that entity.

4.      Auto calculation of Audit Fees:

a.      Based on the address and financial information submitted by the Appointor an audit fees before taxes would be displayed to the Appointor

b.      The Fees once displayed it is non negotiable and should be accepted by the Appointor before final submission of the request form.

 

5.      Communication to Auditor:

a.      Based on the data submitted by the Appointor an artificial intelligence will decide the Auditor

b.      Basic things to be remember while choosing the auditor is local auditor should be given priority so as to minimize the cost and each auditor in the data base should be given an opportunity to do the audit.

c.       While running the Artificial Intelligence biased things like the auditor should have prior audit experience in those like companies should be avoided, so as to give opportunity to the newcomer.

d.      At the time of communication to the auditor the auditor should only know the area and fees for the audit and not the client’s name.

e.      The auditor should accept or reject each list of audits submitted to him

6.      Final Acceptance by the Appointor:

a.      After the acceptance by the auditor the Appointor should be prompted to deposit the audit fees

b.      After depositing the audit fees the name of the client and auditor will be communicated to each other. Prepayment of audit fees will remove the chances of undercutting and increase the level of independence.

c.       Once done the appointment should be valid for 3,4,5 years as may be suitable

7.      Maintenance of the server:

a.      A fee should be collected both from the Appointor and auditor for the maintenance of the server based on the audit fees

b.      The server should also be required to be audited so as to check its effectiveness

 

Whether to deduct TDS or collect TCS on payment made to " Foreign Tour Operators" in Income Tax for Overseas Tour Packages

 TCS on payment to Foreign Tour Operators for Overseas Tour Packages under Section 206C(1G)(b)

> The Seller/Tour Operator should collect TCS @ 5%

> If PAN/AADHAR of buyer is not available TCS @ 10% as per Section 206CC

> No minimum threshold, meaning, TCS will be applicable irrespective of the value of the tour package

TDS on payment to Foreign Tour Operators for Overseas Tour Packages under Section 194C

> The payer should collect TDS @ 1% or 2% based on the payee category

> If PAN/AADHAR of buyer is not available TCS @ 10% as per Section 206AA

> If payment likely to exceed Rs.1,00,000/- during the current financial year deduct TDS

Now question arises whether the buyer should deduct TDS U/s 194C or Seller should Collect TCS U/s 206C(1G)(b)? For answer it is the TDS which overrides the TCS provisions, meaning, TDS U/s 194C will be applicable in that case as per Section 206C(1G)(b) 5th Proviso which reads as under:

"Provided also that the provisions of this sub-section shall not apply, if the buyer is,—

 (i)  liable to deduct tax at source under any other provision of this Act and has deducted such amount;"

Decoding the above proviso:

> Is the buyer liable to deduct TDS? meaning, check the applicability of TDS U/s 194C

> The buyer must have deducted TDS. Meaning, the word used in the proviso is " and" so if the buyer not deducted TDS it is the responsibility of the seller to collect TCS

Important Point to remember 

      The buyer should deduct TDS based on the above provisions as otherwise the buyer will lose the benefit of claiming expenditure as otherwise available to him in accordance with the Income Tax Act further he may face the penalty in accordance with law. So, it is the onus of the buyer to deduct TDS and if he fails to deduct TDS it is the onus of the seller to collect TCS

Thanking You:

CA Kanhu Charan Samal