Any amount of the capital gains which was not appropriated by an assessee towards the purchase of a new house within one year before the date of transfer of the original house,or which is not used by him for the purchase or construction of a new house before the date of furnishing his returns of income, should be deposited in specified bank accounts. The amount should be deposited before the due date of filing income tax returns.
The amount can be used in accordance with any scheme the central government may frame. The proof of such deposit should be attached with the income tax returns. The amount already used by an assessee for the purpose of purchase or construction of a new house together with the amount deposited will be deemed to be the cost of the new house.
In case the amount deposited is not used fully or partly for the purchase or construction of a new house within the period specified, the unused amount will be charged as income of the previous year in which the period of three years from the date of transfer of the house expires.
An assessee will be entitled to withdraw the amount in accordance with the provisions of the scheme.