CBDT Authorises 19 New Banks for Capital Gains Account Scheme: Major Relief for Taxpayers
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The Central Board of Direct Taxes (CBDT) has issued an important notification on November 19, 2025, significantly expanding the network of authorised banks under the Capital Gains Account Scheme (CGAS), 1988. This move aims to provide greater convenience and accessibility to taxpayers who need to deposit capital gains while claiming tax exemptions.
About the Notification
Notification Number: S.O. 5294(E)
Date of Issue: November 19, 2025
Issuing Authority: Ministry of Finance, Department of Revenue, Central Board of Direct Taxes
File Number: F. No. 162/2025/ F. No. 370142/23/2024-TPL
Issued by: Kritika Jain, Under Secretary (Tax Policy and Legislation)
This notification has been issued in pursuance of clause (e) of paragraph 2 of the Capital Gains Account Scheme, 1988, and is a continuation of earlier notifications G.S.R.725(E) dated June 22, 1988, and G.S.R 859(E) dated November 30, 2012.
What is Capital Gains Account Scheme (CGAS)?
The Capital Gains Account Scheme (CGAS) is a government initiative introduced in 1988 under the Income Tax Act, 1961. It allows taxpayers to temporarily deposit capital gains from the sale of assets into designated accounts maintained with authorised banks.
Key Features of CGAS
- Helps taxpayers claim exemption from capital gains tax under Sections 54, 54B, 54D, 54F, 54G, 54GA, and 54GB
- Allows deferral of tax liability until funds are reinvested in specified assets
- Must be deposited before the due date of filing Income Tax Return
- Provides tax-free interest on deposits under Section 10(4A)
- Enables flexible utilization of capital gains for purchasing new assets
List of 19 Newly Authorised Banks
The Central Government has authorised all branches (except rural branches) of the following 19 banks to receive deposits and maintain accounts under CGAS:
| Sr. No. | Bank Name |
|---|---|
| 1 | HDFC Bank Ltd |
| 2 | ICICI Bank Ltd |
| 3 | Axis Bank Ltd |
| 4 | City Union Bank Ltd |
| 5 | DCB Bank Ltd |
| 6 | Federal Bank Ltd |
| 7 | IDFC FIRST Bank Ltd |
| 8 | IndusInd Bank Ltd |
| 9 | Jammu and Kashmir Bank Ltd |
| 10 | Karnataka Bank Ltd |
| 11 | Karur Vysya Bank Ltd |
| 12 | Kotak Mahindra Bank Ltd |
| 13 | RBL Bank Ltd |
| 14 | South Indian Bank Ltd |
| 15 | Yes Bank Ltd |
| 16 | Dhanlaxmi Bank Ltd |
| 17 | Bandhan Bank Ltd |
| 18 | CSB Bank Ltd |
| 19 | Tamilnad Mercantile Bank Ltd |
Important Definition: Rural Branch
Rural Branch: According to the notification, a rural branch means a branch which is situated and functioning at a centre where the population, in accordance with the 2011 census, is less than ten thousand.
Note: Rural branches of these banks are NOT authorised to operate CGAS accounts under this notification.
Who Can Benefit from CGAS?
The Capital Gains Account Scheme is available to various categories of taxpayers who earn capital gains and wish to claim tax exemptions:
| Section | Taxpayer Category | Type of Capital Gains |
|---|---|---|
| 54 | Individual, HUF | Long-term capital gains from sale of residential house property |
| 54B | Individual, HUF | Capital gains from sale of agricultural land |
| 54D | Any Person | Capital gains from compulsory acquisition of land/building |
| 54F | Individual, HUF | Net consideration from sale of any asset other than residential house |
| 54G | Any Person | Capital gains from shifting industrial undertaking from urban to rural area |
| 54GA | Any Person | Capital gains from shifting to Special Economic Zone (SEZ) |
Types of CGAS Accounts
There are two types of deposit accounts available under CGAS:
Type A – Savings Account
- Operates like a regular savings bank account
- No restrictions on withdrawal
- Withdrawn amount must be utilized within 60 days
- Unutilized amount must be re-deposited immediately
- Form C required for first withdrawal, Form D for subsequent withdrawals
Type B – Term Deposit Account
- Fixed deposit for a specified period (typically up to 3 years)
- Earns interest at rates fixed by RBI
- Withdrawal requires approval from Assessing Officer
- Suitable for planned long-term investments
Timeline for Utilization
Taxpayers must utilize the deposited capital gains within specific timeframes:
- For purchasing a new asset: 2 years from the end of the financial year in which the original asset was sold
- For constructing a new asset: 3 years from the end of the financial year in which the original asset was sold
- Deposit deadline: Before the due date of filing Income Tax Return (usually July 31 of the assessment year)
Tax Implications
Understanding Tax Treatment
- Interest earned on CGAS deposits is taxable as income from other sources
- TDS is deducted on interest earned, and certificates are issued
- If funds are not utilized within prescribed timelines, the entire unutilized amount becomes taxable
- Unutilized amounts are taxed as long-term capital gains at the prevailing rate (currently 12.5%)
- For deposits made before July 23, 2024, different tax rates may apply
Why This Expansion Matters
The inclusion of 19 new banks, particularly major private sector banks, brings several benefits to taxpayers:
- Wider Branch Availability: Access to CGAS services across metro, urban, and semi-urban locations
- Improved Convenience: Reduced dependence on limited public sector banks
- Better Compliance: Easier access encourages taxpayers to properly utilize CGAS provisions
- Enhanced Customer Service: Private banks often provide superior customer service and digital banking facilities
- Increased Competition: More banks mean better services and possibly better interest rates
Previously Authorised Banks
Before this notification, only the following banks were authorised under earlier notifications:
- State Bank of India (SBI)
- IDBI Bank
- Bank of Baroda (BOB)
- Syndicate Bank
- Central Bank
- Corporation Bank
The new notification significantly expands this list by adding 19 more banks, thereby multiplying the available service points for taxpayers across India.
How to Open a CGAS Account
To open a Capital Gains Account, taxpayers should follow these steps:
- Visit any non-rural branch of the authorised banks
- Carry proof of capital gains (sale deed, transfer documents, etc.)
- Fill out the account opening form
- Choose between Type A (Savings) or Type B (Term Deposit) account
- Deposit the capital gains amount before the ITR filing due date
- Obtain passbook (Type A) or fixed deposit receipt (Type B)
- Keep all documents for ITR filing and future reference
Penalty for Non-Utilization
Taxpayers must be aware of the consequences of not utilizing deposited funds:
- If the amount is not utilized within the specified period, the exemption benefit is lost
- The entire unutilized amount is deemed as long-term capital gains
- Tax becomes payable at applicable LTCG rates in the year of expiry
- Form G must be submitted to the Assessing Officer along with supporting documents
- Tax due on deemed capital gain must be paid before AO approves Form G
Practical Tips for Central Government Employees
Important Considerations
- Open CGAS account immediately after property sale if you cannot reinvest before ITR filing
- Maintain proper documentation of the property sale transaction
- Calculate your capital gains accurately to determine deposit amount
- Set reminders for utilization timelines to avoid losing exemption benefits
- Consult a tax professional if unsure about eligibility or procedures
- Consider your housing plans carefully before making deposits
- Keep track of interest earned as it is taxable income
Conclusion
The CBDT notification dated November 19, 2025, marks a significant improvement in taxpayer services by authorising 19 major banks to operate CGAS accounts. This expansion particularly benefits property sellers and investors who need temporary parking facilities for capital gains while planning reinvestment. With wider branch availability and better service options, compliance with capital gains tax provisions becomes easier and more convenient for all taxpayers, including central government employees.
For central government employees planning to sell property or other capital assets, understanding and utilizing CGAS provisions can result in substantial tax savings while ensuring full compliance with Income Tax regulations.
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