Capital Gains Account Scheme Updated: New Rules Bring Relief for Taxpayers
More banks, digital deposits, and simplified compliance under the Capital Gains Accounts (Second Amendment) Scheme, 2025
Property sellers and investors get easier access to tax exemptions on long-term capital gains
By Our Legal Correspondent
New Delhi: November 22, 2025:
The Capital Gains Account Scheme (CGAS), first introduced in 1988, has long been a tool for taxpayers to save tax on long-term capital gains by parking unutilised amounts until reinvestment. On November 19, 2025, the Ministry of Finance notified the Capital Gains Accounts (Second Amendment) Scheme, 2025, bringing major reforms to modernize the system.
The updated rules expand the list of authorised banks, allow electronic deposits, and streamline compliance. Experts say the changes will benefit property sellers and investors who often need extra time to reinvest gains under Sections 54, 54F, and related provisions of the Income Tax Act, 1961.
Key Changes in the New Rules
- Expanded banking access:
- Earlier, CGAS deposits were limited mainly to public sector banks and IDBI Bank.
- Now, 19 private sector and small finance banks including HDFC, ICICI, Axis, and South Indian Bank can accept deposits.
- Deposits can be made at all non-rural branches.
- Electronic deposits introduced:
- Taxpayers can now deposit via net banking, UPI, IMPS, RTGS, NEFT, debit/credit cards, and BHIM Aadhaar Pay.
- The effective date of deposit will be the date of receipt by the deposit office, whether physical or electronic.
- Digital compliance:
- Passbooks and statements can be furnished electronically.
- From April 1, 2027, closure of accounts must be done electronically using digital signatures or electronic verification codes.
- Clarity on rules:
- The amendment incorporates Section 54GA (capital gains exemption for shifting industrial undertakings).
- Operational rules have been clarified to reduce disputes.
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Why This Matters for Taxpayers
- Ease of access: More banks and digital options mean taxpayers no longer need to rely on limited branches.
- Reduced paperwork: Electronic deposits and statements simplify compliance.
- Faster transactions: Digital payments ensure timely deposits, reducing risk of missing deadlines.
- Broader coverage: Property sellers, industrial undertakings, and investors benefit from clearer rules.
Impact on Property Sellers
Property sellers often face tight timelines to reinvest capital gains into new property. The updated CGAS rules provide:
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- More deposit options across banks and branches.
- Digital convenience to deposit gains quickly.
- Legal clarity on exemptions under Sections 54 and 54F.
This ensures smoother compliance and reduces stress for taxpayers dealing with large transactions.
Expert Reactions
- Tax professionals and financial advisors welcomed the reforms:
- TaxGuru noted that electronic deposits align CGAS with modern banking practices.
- CNBC TV18 highlighted that expansion to private banks is a major relief for ordinary taxpayers.
- Zee Business reported that the changes reduce paperwork and make saving tax on capital gains easier.
Broader Context
The CGAS was introduced in 1988 to help taxpayers claim exemptions when reinvestment was delayed. Over time, limited banking access and outdated processes made compliance difficult.
The 2025 amendment modernizes the scheme, aligning it with India’s push for digital banking and financial inclusion. It also supports the government’s broader goal of simplifying tax compliance and reducing litigation.
Conclusion
The Capital Gains Accounts (Second Amendment) Scheme, 2025 marks a major step in modernizing India’s tax compliance framework. By expanding banking access, introducing electronic deposits, and clarifying rules, the government has made it easier for taxpayers to save tax on capital gains.
For property sellers, industrial undertakings, and investors, the reforms provide relief, convenience, and clarity. As India moves towards a more digital economy, the updated CGAS ensures that taxpayers can comply with the law efficiently while enjoying the benefits of tax exemptions.
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