Summary of this article
19 new banks, including private and small finance banks, are now authorised to offer Capital Gains Account Scheme (CGAS) services
CGAS allows taxpayers to deposit unutilised long-term capital gains to claim tax exemption under certain Income Tax Act sections
From April 1, 2027, closure of CGAS accounts would be possible electronically
The Ministry of Finance has introduced a major change in the Capital Gains Account Scheme (CGAS), 1988, now named the Capital Gains Accounts (Second Amendment) Scheme, 2025. The idea is to make the tax-exempt deposits more accessible and aligned with modern banking practices. Effective November 19, 2025, this change could be useful for taxpayers, particularly those who sell their property. The ministry has expanded the number of banks that are authorised to open CGAR accounts.
Which New Banks Have Been Added For CGAS Services?
A total of 19 banks, including private and small finance banks, have been added to the list of authorised banks in this amendment. These banks include:
HDFC Bank
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ICICI Bank
Axis Bank
Kotak Mahindra Bank
IndusInd Bank
IDFC First Bank
Yes Bank
City Union Bank
Karnataka Bank
Karur Vysya Bank
Federal Bank
Bandhan Bank
DCB Bank
CSB Bank
Dhanlaxmi Bank
RBL Bank
Jammu & Kashmir Bank
South Indian Bank
Tamilnad Mercantile Bank
Taxpayers can now open a CGAS account at non-rural branches of these newly authorised 19 banks. Notably, the rural branch (A branch located in areas with less than 10,000 population as per the 2011 Census) is not included in the list.
Who Can Open A CGAS Account And When?
The CGAS accounts are designed to deposit the capital gains from selling a capital asset, such as land, building, jewellery, and certain other investments, to claim tax exemption on the gains. The Income-tax Act, 1961, lays provisions under Section 54 and its sub-sections, such as 54A, 54D, 54F, 54G, 54GA, etc., to use capital gains in certain ways to save tax.
For example, when a person sells a long-term capital asset and to claim tax exemption, intends to reinvest the gains into a new property, they can deposit the gains into a CGAS account for up to three years and enjoy tax exemption. This is useful when the time needed to complete the reinvestment is beyond the income-tax return filing deadline.
So, the taxpayers who cannot complete the mandated reinvestment within the stipulated period, which is typically two to three years, can open a CGAS account to deposit the capital gain proceeds before the ITR filing date.
Failing to utilise the sale proceeds for the specified purpose as per the Act and not depositing them in the CGAS account means no tax exemption on the gains.
How Would Inclusion Of More Banks Help Taxpayers?
The amendment is expected to improve not only accessibility, but also services through real-time gross settlement (RTGS), National Electronic Fund Transfer (NEFT), Unified Payment Interface (UPI), net banking, and debit and credit cards.
Starting April 1, 2027, taxpayers will be able to submit an electronic closure of their CGAS account, instead of visiting the bank branch physically.
The enhanced access and flexibility of opening and closing the accounts would improve taxpayers’ experience and better tax compliance.
