Income Tax Update: Finance Ministry opens Capital Gains Account Scheme to 19 private banks; check full list

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In a big boost to Capital Gains Account Scheme (CGAS), the Finance ministry, for the first time, has authorised 19 private sector banks — including HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and Yes Bank — to accept CGAS deposits. Until now, the facility was largely restricted to public sector banks and IDBI Bank (barring rural branches).

In an official notification, dated November 19, 2025, the ministry has listed the newly authorised lenders, including major private and regional banks like City Union Bank, Karnataka Bank, Karur Vysya Bank, DCB Bank, RBL Bank, Bandhan Bank and Tamilnad Mercantile Bank.

However, the restriction on rural branches continues, meaning only branches in areas with a population above 10,000 (as per the 2011 Census) can offer the scheme.

The rules have also been expanded. The government has added Section 54GA to the Capital Gains Account Scheme, allowing capital gains from shifting an industrial undertaking from an urban area to an SEZ to be deposited under CGAS. This is in addition to the more common exemption under Section 54, which lets taxpayers avoid long-term capital gains tax on selling a plot or a house if they reinvest the proceeds into a new residential property within the prescribed timelines.

Under CGAS, taxpayers can temporarily park their capital gains during the “waiting period” — the gap between selling an old asset and buying or building a new one — to remain eligible for exemption.

The scheme offers two types of deposit accounts:

• Account-A, which works like a savings account, allows withdrawals as needed and earns regular savings interest.
• Account-B, a term deposit, can be cumulative or non-cumulative, and withdrawals are allowed only after maturity. Deposits can be made in one go or in instalments before the income tax return due date.

Key features include:

• Minimum deposit of Rs 1,000, with no upper limit.
• Investors are allowed to deposit lump-sum amounts
• If not, they can even add instalments up to the due date for filing their income tax return under Section 139(1)

Two maturity options:

• Cumulative, where interest is compounded and paid at maturity.
• Non-cumulative, where interest is paid out periodically.

• 7 days for deposits under the maturity option.
• 6 months for deposits under the income option.

After the tenure ends, the deposit automatically closes unless renewed.

No loan or overdraft facility

The scheme does not allow the investors to use the deposits as collateral, margin money, or security for any kind of fund-based or non-fund-based banking facility.

Penalty for premature withdrawal

Exiting early attracts a 1% penalty, and even then, withdrawals require approval and submission of the prescribed forms to ensure the funds are used strictly for eligible reinvestment.