Capital gains on transfer of assets

The portion of the capital gain that the assessee does not use to finance the acquisition of a new asset within a year of the date on which the transfer of the prior asset occurred, or which, prior to the date of submitting the return of income, is not used by him for the acquisition or building of the new asset, before submitting such a return, he must deposit that sum into an account at any bank or other institution that may be mentioned in any programme. This scheme may be framed by Central Government by giving notification in the official gazettee. The money that the assessee has already used to acquire or construct the new asset, along with the amount that has been deposited, will be considered to constitute the cost of the new asset. If the money deposited pursuant to this subsection is not used entirely or in part for the acquisition or development of the new asset within the time frame provided, then the assessee shall be allowed to withdraw such money in line with the aforementioned plan, and the amount not so used shall be charged as income of the preceding year in which the term of three years from the date of the transfer of the original asset ends.

No need to wait for 12a registration.

Application of retained assets

The assets retained may be dealt with in the following manner:

1. In relation to all the assessment years relevant to the prior year to which the income relates and in respect of which he is in default, the amount of the existing liability under the said subsection and the amount of the liability determined upon completion of the regular assessment or reassessment may be recovered out of such assets.

2. If the assets are entirely made up of cash, or partly of cash and partly of other assets, the assessing officer may use that cash to pay off debts, and the assessee will be free of that debt to the extent of the cash used.

3. Assets other than cash may also be used to pay off any liabilities that are still owing, and for this reason, such assets will be considered to be under distraint as if the distraint were carried out by the assessing officer with permission from the Commissioner, and the assessing officer may sell such assets to recoup the amount of such obligations. Nothing in the aforementioned sub-section shall prevent the recovery of the aforementioned number of obligations by any other method specified in this Act.

More info on 80 g.