Capital Gains Accounts Scheme
The Capital Gains Accounts Scheme (CGAS), 1988, was introduced by the Central Government to provide taxpayers with a structured mechanism to safeguard their tax exemptions on long-term capital gains.
Under the Income Tax Act, 1961, taxpayers are often required to reinvest profits from the sale of assets into specified avenues within a fixed timeline.
However, when a taxpayer is unable to reinvest these gains before the due date for filing their Income Tax Return, the CGAS serves as a vital "parking tool".
By depositing unutilized gains into this designated account, the funds are legally treated as reinvested, allowing the taxpayer to claim immediate tax exemptions while they finalize their investment plans for a new property or asset.
This scheme offers essential flexibility for individuals and Hindu Undivided Families (HUFs) who require more time to navigate the real estate market or complete phased construction.
Operating through two distinct account types — Type A for liquid, savings-oriented withdrawals and Type B for fixed, term-deposit investments—the CGAS ensures that funds remain secure and productive.
The Capital Gains Accounts Scheme (CGAS), 1988, is a powerful regulatory tool that allows individuals and HUFs selling capital assets (primarily property) to temporarily park their capital gains to avail tax exemptions under Sections 54, 54B, 54D, 54F, 54G, and 54GA of the Income Tax Act.
- The launch of the Capital Gains Accounts Scheme (CGAS) at our bank, following the authorization by the Ministry of Finance, represents a substantial opportunity for both our customers and our business. It allows us to capture a critical life event—the sale of a property—and become a more holistic financial partner to those clients.
- The CGAS enables taxpayers to:
- Deposit unutilized long-term capital gains within the ITR filing deadline
- Park capital gains without immediate reinvestment pressure
- Withdraw and reinvest within the prescribed time period
- Claim Tax Exemption under Sections 54 to 54GB of the Income-Tax Act, 1961
Eligible Depositors
- Individual taxpayers
- Hindu Undivided Family (HUF)
- Companies
- Trusts
- Partnership firms
- Any assesses eligible under Sections 54, 54B, 54D, 54F, 54G, 54GA, 54GB
Eligible Branches:
- Metropolitan branches
- Urban branches
- Semi Urban branches
| Section Number | Capital Gains made on | Category of person | Maximum Period of Deposits |
|---|---|---|---|
| 54 | Sale of residential house | Individual or HUF | 24/36 Months |
| 54B | Sale of land used for agricultural purpose | Individual or HUF | 24 Months |
| 54D | Compulsory acquisition of land and building | Any taxpayer | 36 Months |
| 54E | Sale of any long term capital asset | Any taxpayer | 36 Months |
| 54EC | Sale of long term capital asset being land or building or both | Any taxpayer | 36 Months |
| 54F | Sale of any long term capital asset not being residential property | Individual or HUF | 24 Months |
| 54G | Transfer of asset (machinery, plant or building, land or right in land or building) in case of shifting of industrial undertaking from urban area | Any taxpayer | 36 Months |
| 54GA | Transfer of asset/s (machinery, plant or building, land or right in land or building) in case of shifting of industrial undertaking from urban area to Special Economic Zone | Any taxpayer | 36 Months |
| 54GB | Transfer of residential property | Any taxpayer | 36 Months |
*KARUR VYSYA BANK RESERVES THE RIGHT TO CHANGE / ALTER/ WITHDRAW TERMS AND CONDITIONS OF THE SCHEME.
