Govt brings Major Amendments to Capital Gain Accounts Scheme: Know Complete details [Read Notification]

The Ministry of Finance has notified the Capital Gains Accounts (Second Amendment) Scheme, 2025, bringing important changes to modernise the Capital Gains Accounts Scheme (CGAS), 1988.

Wider Coverage of Sections for Deposits

Earlier, CGAS applied to capital gains claimed under certain specific sections (like 54, 54F, 54G etc.). Now, the government has extended the scheme to include Section 54GA as well. This means taxpayers claiming exemption under section 54GA (capital gains on shifting industrial undertakings from urban to non-urban areas) can also use CGAS.

Increase in Banks Eligible as ‘Deposit Office’

The definition of "Deposit Office" has been revised. Earlier, only selected nationalized banks handled CGAS accounts. Now, the scheme allows:

• State Bank of India and its subsidiaries
• All nationalised ‘corresponding new banks’
• Any banking company covered under the Banking Regulation Act, 1949, provided they are authorised by the Central Government

Electronic Payment Mode

This is one of the best amendments to the scheme. A new definition of "electronic mode" has been added. The amendment reads that “electronic mode” means payment by use of electronic clearing system through a bank account or by way of any of the following modes, namely:-

(a) credit card;

(b) debit card;

(c) net banking;

(d) IMPS (Immediate Payment Service); (e) UPI (Unified Payment Interface);

(f) RTGS (Real Time Gross Settlement); (g) NEFT (National Electronic Funds Transfer), and (h) BHIM (Bharat Interface for Money) Aadhaar Pay;’.

This, thus, removed the high dependency on the cheques and demand drafts.

Effective Date of Deposit

When a deposit is made through cheque, or demand draft, or electronic mode…the effective date of deposit for claiming exemption will be: The date the deposit office receives the payment, subject to the cheque/draft/e-payment being successfully realized.

The amendment reads that “ If the deposit is made by a cheque or a draft or by electronic mode then, subject to such cheque or draft or payment by such electronic mode being realised, the effective date of deposit for the purpose of claiming exemption under the Act shall be the date on which the cheque or draft or payment by such electronic mode is received by the deposit office along with the application made under sub-paragraph (1) or sub-paragraph (5), as the case may be.”

Also read: Centre Notifies Digital Personal Data Protection Rules, 2025, DataProtection Board Established [Read Notification]

E- Passbook Allowed and Withdrawals / Conversion of Accounts through E-mode

The amendments now recognize Electronic statement of account alongside the traditional passbook for all purposes. Additionally, while filing applications for withdrawals or conversion of accounts, payments can now be processed using electronic modes. This applies to:

• Form G
• Form H
• and payments to builders, sellers, etc.

Mandatory Digital Closure of CGAS Accounts (From 1 April 2027)

From 1st April 2027, closure of CGAS accounts will become fully electronic. The Account closure requests must be submitted using Digital Signature or Electronic Verification Code (EVC). Also, the DGIT (Systems) will now be responsible for creating and managing the digital workflow.

According to the new amendment “The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), or any person authorised by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems), as the case may be, shall,-

a) specify the procedure for filing of Form G and Form H;

b) forward Form G or Form H, as applicable, to the Assessing Officer having jurisdiction over the applicant, and upon approval by the Assessing Officer, to the applicant;

c) specify the data structure, standards and manner of generation of electronic verification code, referred to in sub-paragraph (7), for verification of the person furnishing the said Form; and

d) be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the Form so furnished”.

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