In November 2025, the Ministry of Finance (MoF) notified the Capital Gains Accounts (CAG) (2nd Amendment) Scheme, 2025, which revises the 1988 framework by allowing taxpayers to temporarily deposit capital gains in a designated bank account to retain eligibility for tax exemption while purchasing or constructing a new property.
- The amendment, effective from 19 November, 2025.
Exam Hints:
- What? MoF notified CAGS, 2025
- Effective from: November 19, 2025
- Introduced in : 1988
- Previous Amendment: Last amended in 2012
- Sections Covered: 54, 54B, 54D, 54F, 54G, 54GA (industrial undertaking shift to SEZ), 54GB
- New Payment Option: Electronic mode of payments accepted
- Documentation Charges: Electronic account statement accorded same status as physical passbooks
- Expanded Bank Coverage: Includes 19 private and small finance banks + PSBs and IDBI Bank for non-rural branches
- Effective Date: Date of cheque/DD/electronic deposit receipt at deposit office
- Account closure: Can be closed through electronic filing, from April 1, 2027
- Section 54GA: CAGS has been expanded to include Section 54GA.
About Capital Gains Accounts (CAG) Scheme:
CAG Scheme: The scheme exists to ensure that taxpayers who intend to claim capital gain exemptions but are unable to invest the amount immediately can deposit the unutilised funds into a designated account.
- This protects the exemption claim and provides an organised mechanism for tracking utilisation.
- The scheme was previously amended in 2012.
Amendment: The amendment modernises the scheme by introducing digital payments, electronic statements and online account closure.
Sections: These amendments mark a major shift towards digitalisation, broader applicability and streamlined compliance for taxpayers, NRIs (Non-Resident Indians) and businesses reinvesting capital gains under Sections 54, 54B, 54D, 54F, 54G, 54GA and 54GB of the Income-tax Act, 1961.
Key Amendments:
New Payment Options: A key reform is the inclusion of electronic payment modes: credit and debit cards, net banking, Immediate Payment Service (IMPS), Unified Payment Interface (UPI), Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Bharat Interface for Money(BHIM) Aadhaar Pay, for making deposits into CGAS accounts.
Documentation changes: Electronic account statements are now formally accorded the same status as physical passbooks for withdrawals, verification and updates.
- The CGAS forms have also been upgraded to include fields for RTGS, IMPS and NEFT information for electronic transactions.
Expanded Bank Coverage for CGAS Deposits: The amendment broadens the definition of a “Deposit Office” to include 19 private sector and small finance banks, in addition to Public Sector Banks(PSBs) and IDBI Bank. These authorised banks can now accept CGAS deposits at all non-rural branches.
- The banks are: HDFC Bank, ICICI Bank, Axis Bank, City Union Bank(CUB), DCB Bank, Federal Bank Limited, IDFC FIRST Bank, IndusInd Bank, Jammu & Kashmir(J&K) Bank, Karnataka Bank, Karur Vysya Bank(KVB), Kotak Mahindra Bank(KMB), RBL Bank, South Indian Bank(SIB), Yes Bank, Dhanlaxmi Bank, Bandhan Bank, CSB Bank, and Tamilnad Mercantile Bank(TMB).
CAGS Account closure: Effective April 1, 2027, CGAS accounts can be closed solely through electronic filing, authenticated via digital signature or electronic verification code.
Effective date of deposits: When the deposit is made by a cheque or a Demand Draft(DD), or electronically, the effective date of deposit for the purpose of claiming exemption 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 for the CGAS account.
Section 54GA: Apart from the above, CGAS has been expanded to include Section 54GA, which will allow exemption on depositing unutilised capital gains from shifting an industrial undertaking from an urban area to an SEZ (Special Economic Zone).
About Ministry of Finance (MoF)
Union Minister – Nirmala Sitharaman (Rajya Sabha – Karnataka)
Minister of State(MoS) – Pankaj Chaudhary (Constituency – Maharajganj, Uttar Pradesh, UP)
