On 9 November 2025, the Government of India notified the Capital Gains Accounts (Second Amendment) Scheme, 2025, marking one of the most significant modernisations to the Capital Gains Accounts Scheme (CGAS) since its inception in 1988. Issued under multiple capital gains–related provisions of the Income-tax Act, this amendment aims to align CGAS with India’s increasingly digital financial ecosystem while broadening its scope and improving user experience.
Why This Amendment Matters
The Capital Gains Account Scheme serves as a crucial compliance mechanism for taxpayers seeking exemptions under sections 54, 54B, 54D, 54F, 54G, 54GA, and 54GB. It allows individuals to park capital gains proceeds in designated accounts until the eligible investment is made. Over the years, however, the scheme remained heavily paper-based, posing operational challenges.
The 2025 amendment addresses these limitations head-on by modernizing processes, expanding digital payment options, and integrating electronic documentation.
Key Enhancements Introduced in the 2025 Amendment
1. Inclusion of Section 54GA
The amendment officially incorporates Section 54GA—which provides capital gains exemption for shifting industrial undertakings from urban to special economic zones—into the CGAS framework. This ensures seamless applicability of deposit rules to all relevant capital gains categories.
2. Redefined “Deposit Office”
A major update comes in the definition of “Deposit Office.”
The new clause expands eligible branches to include:
- SBI, its subsidiary banks, and corresponding new banks
- Any banking company under the Banking Regulation Act, 1949
…but with a crucial condition:
Only those branches notified by the Central Government can accept and maintain CGAS deposits. This introduces standardization and ensures regulatory oversight.
3. Introduction of “Electronic Mode” for Payments
One of the most transformative changes is the formal inclusion of multiple electronic modes for making deposits. These include:
- Credit/debit cards
- Net banking
- IMPS, UPI, RTGS, NEFT
- BHIM Aadhaar Pay
This shift not only enhances convenience but also strengthens the digital audit trail.
4. Electronic Deposits Receive Equal Recognition
Deposits made via cheque, draft, or electronic mode will now be treated uniformly.
The effective date of deposit will be the date the electronic payment or instrument is received by the deposit office, subject to realization. This ensures clarity for taxpayers claiming timely exemptions.
5. E-Statements Recognised Alongside Passbooks
In yet another move toward digital documentation, various paragraphs now recognize electronic statements of account on par with physical passbooks. This reduces paperwork and eases compliance for taxpayers, especially those operating digitally.
6. Digital Closure of Accounts From 1 April 2027
A major forward-facing reform is the mandate that closure requests under Form G or Form H must be submitted electronically, authenticated with a digital signature or electronic verification code (EVC) starting 1 April 2027.
To support this transition, the Directorate of Income-tax (Systems) will:
- Specify procedures for filing Forms G and H
- Forward applications to Assessing Officers and taxpayers
- Define data standards and EVC architecture
- Ensure secure storage, retrieval, and archiving
7. Updates to Forms A and C
Both forms now reflect new references to section 54GA and allow for the electronic mode of deposits. For Form C, details of online transactions such as RTGS/IMPS/NEFT numbers have been added.
A More Accessible, Digital-Ready CGAS
With these amendments, the Capital Gains Accounts Scheme finally aligns with India’s digital banking ecosystem. Taxpayers will benefit from easier compliance, quicker processing, and greater transparency—marking a thoughtful evolution of a scheme that remains central to capital gains tax planning in India.