Capital Gains Account Scheme explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Capital Gains Account Scheme (CGAS) lets you park capital gains in a designated bank account to keep your exemption alive when you cannot reinvest before the tax-filing due date.
Why use CGAS
- To claim exemption under Sections 54/54F/54B etc. when you have not yet bought/constructed the new asset
- Deposit the unutilised gain in a CGAS account before the ITR due date
- Withdraw and use it for the qualifying investment within the time limit
Types of accounts
- Account A (savings) — for flexible withdrawals
- Account B (term deposit) — for a fixed period, like an FD
Caution
If the amount is not used within the prescribed period (e.g. 2 years for purchase, 3 for construction), the unused portion becomes taxable as capital gains in that later year.
Frequently Asked Questions
What is the Capital Gains Account Scheme?
A scheme to deposit unutilised capital gains in a designated bank account to preserve exemption until you reinvest.
When should I use CGAS?
When you cannot buy/construct the new asset before the ITR due date but want to keep the exemption.
What if I don't use the CGAS amount in time?
The unused amount becomes taxable as capital gains in the year the time limit expires.
Which banks offer CGAS?
Most public-sector and major banks offer CGAS accounts.
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