Capital Gains Accounts (Second Amendment) Scheme, 2025: A Digital Leap for Taxpayers
The Capital Gains Accounts (Second Amendment) Scheme, 2025, notified by the Ministry of Finance on November 19, 2025, modernizes the 1988 framework by introducing digital payments, electronic statements, and mandatory online closures from 2027, while expanding eligibility to Section 54GA.[1][2][3]
Understanding the Capital Gains Accounts Scheme (CGAS)
The CGAS allows taxpayers to deposit unutilized capital gains from the sale of assets into a special bank account to claim tax exemptions under Sections 54 to 54GB of the Income Tax Act, 1961, while they search for or construct a new residential property or specified asset.[1][4]
Originally introduced in 1988 and last amended in 2012, the scheme helps individuals and businesses avoid immediate tax liability on long-term capital gains by parking funds temporarily.[2][5]
- Deposits must be made before the due date of filing the income tax return.
- Funds earn interest similar to savings accounts (Type A) or fixed deposits (Type B).
- Unutilized amounts post-deadline become taxable.[1][7]
Key Amendments Introduced in 2025
Expansion of Scope to Section 54GA
The scheme now explicitly covers capital gains under Section 54GA, arising from shifting industrial undertakings from urban areas to Special Economic Zones (SEZs), promoting investments in SEZs.[2][3][5]
Previously limited to Sections 54 to 54G, this inclusion broadens applicability for businesses relocating to promote economic zones.[6]
Introduction of Electronic Deposits and Expanded Bank Network
Deposits can now be made via electronic modes including RTGS, NEFT, IMPS, UPI, credit/debit cards, net banking, and BHIM Aadhaar Pay, alongside cash, cheques, or drafts.[1][3][5]
The effective deposit date is when the deposit office receives the payment, subject to successful realization, ensuring clarity for exemption claims.[1][4]
Deposit offices now include non-rural branches of 19 major private banks like HDFC, ICICI, Axis, Kotak Mahindra, and IndusInd, in addition to public sector banks and SBI subsidiaries, as authorized under the Banking Regulation Act, 1949.[3][4][6]
Digital Statements and Mandatory Online Closure
Electronic account statements are now equivalent to physical passbooks for verification, withdrawals, and updates, reducing paperwork.[1][3]
Forms for opening, operating, and withdrawing funds include fields for electronic transaction details like RTGS/IMPS/NEFT numbers.[1]
From April 1, 2027, account closures via Forms G and H must be filed electronically using digital signatures or Electronic Verification Code (EVC), with procedures defined by the Principal Director General of Income Tax (Systems).[1][3][5]
Implications for Taxpayers and Experts’ Views
These changes shift CGAS from a paper-based, cheque-reliant process to a technology-enabled framework, enhancing convenience and compliance.[4][6]
Taxpayers benefit from faster deposits via UPI or net banking, access to more banks, and paperless operations, especially useful for those unable to reinvest gains immediately.[1][7]
- Taxpayers: Easier parking of gains for property sellers or SEZ-shifting businesses, with digital parity for exemptions.
- CA Professionals: Updated forms and electronic processes streamline advisory and compliance.
- Timeline Compliance: Deposits before ITR due date remain critical; unutilized funds post-period are taxable.[5]
Experts welcome the reforms: “The amendments recognize new-age payment modes… Electronic statements now hold significance similar to a passbook,” says Lakshmi Sankar, Executive Director, Nangia Group.[1]
Amit Maheshwari, Tax Partner at AKM Global, notes it facilitates a “streamlined, technology-enabled framework for availing capital gains exemption.”[6]
In summary, the 2025 amendments make CGAS more accessible, digital, and inclusive, aligning with India’s push towards paperless taxation. Taxpayers should consult CAs to leverage these updates effectively for FY 2025-26 filings.