Use of Interest on Capital Gains Account

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  1. Karan Kapahi

    Karan Kapahi New Member

    I have opened a Capital Gain Saving Account and have made a term deposit at the normal bank interest rate for term deposit. The interest on these term deposits after deducting TDS is deposited in my Capital Gain Saving Bank Account. I pay income tax on the interest generated in the financial year. Would like to know whether I can use or transfer the Interest amount to my Normal saving Bank Account leaving the Principal Amount in the account.

    As bank has not issued a cheque book for this account Can I instruct the bankers to put the interest earned to my Normal Saving Bank Account after TDS.

    Thanks
     
  2. rudrabose

    rudrabose Active Member

    Logically speaking, Tax is levied on the Interest earned on Capital Gains Account Scheme and TDS is also deducted from this Interest earned.

    So when you have already paid the Tax on Interest earned, it means that you would be free to use this interest earned as tax has already been paid.

    As far as I know, if full tax is being paid on any income - the taxpayer is free to use it for any purpose.

    PS: I'm not 100% sure on this and it would be great if other members could also throw some light on this.
     
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