Govt notifies capital gains scheme, expands digital payment options

The Capital Gains Accounts (Second Amendment) Scheme, 2025 adds digital payments, e-statements and mandatory online closure from 2027, modernising the 1988 framework for reinvesting capital gains

The government has notified the Capital Gains Accounts (Second Amendment) Scheme, 2025, amending the 1988 framework that allows taxpayers to temporarily park capital gains in a designated bank account to claim tax exemption while they search for or construct a new property.

 

The amendment introduced from November 19 effectively modernises the scheme by introducing digital payments, electronic statements and online account closure. The scheme is commonly used by individuals who are unable to reinvest capital gains before the income tax return deadline.

 

What new digital payment options are now permitted under CGAS?

 

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 BHIM Aadhaar Pay — for making deposits into CGAS accounts. Until now, taxpayers largely depended on cheques and demand drafts. The amendment clarifies that the effective date for claiming exemptions under Sections 54 to 54GB will be the date the bank receives the electronic payment.

 

How does the amendment change documentation and statements?

 

The scheme now formally recognises electronic account statements, placing them on par with physical passbooks for withdrawals, verification and updates. Forms used for opening, operating and withdrawing funds from CGAS accounts have been updated to include fields for electronic transactions such as RTGS/IMPS/NEFT numbers.

 

Which institutions can now operate CGAS deposit accounts?

 

Under the revamped framework, the definition of a deposit office has been widened beyond branches of State Bank of India and nationalised banks to include any authorised banking company notified by the government to accept and maintain capital gains accounts.

 

What are the new rules for closing CGAS accounts?

 

In a major procedural shift, CGAS accounts will be closed only through electronic filing — authenticated using a digital signature or electronic verification code — beginning April 1, 2027. The Principal Director General of Income Tax (Systems) has been authorised to define filing processes for Forms G and H, security and data standards, verification mechanisms and archival policies. The amendment extends the scheme to gains under Section 54GA — gains arising on transfer of assets in shifting an industrial undertaking from an urban area to any SEZ as well. This scheme was last amended in 2012.

 

What do experts say about the changes?

 

“The amendments to the Capital Gains Accounts Scheme, 1988 is a major move in recognising the new-age payment modes. The clarification on the effective date of payment where a deposit is made through cheque, or demand draft or electronic mode is the date the deposit office receives the payment, subject to the cheque/draft/e-payment being successfully realised is a welcome move. Electronic statement of account now holds significance similar to a passbook,” said Lakshmi Sankar, executive director, Nangia Group.