Capital Gains Account Scheme — Park Gains Before the ITR Deadline

Deposit before the due date for filing your income tax return under Section 139(1) for the year in which the capital gain arose — typically 31 July for individuals not under audit. You deposit only the amount of gain (or net consideration under 54F) that you could not reinvest by that date. Reinvestment already completed before filing does not need a CGAS deposit.

CGAS supports the reinvestment exemptions under Sections 54 (residential house sold, new house bought), 54B (agricultural land), 54D (industrial land/building on compulsory acquisition), 54F (any long-term asset reinvested in a house), and 54G/54GA (shifting an industrial undertaking). Section 54EC bonds have only a 6-month window, so CGAS is generally not needed there.

If you neither reinvest nor deposit into CGAS before the ITR due date, the unspent capital gain is taxable in the year of sale — even if you later buy the new asset. The CGAS deposit is the mechanism that preserves the exemption when reinvestment is not yet complete, so missing the deadline forfeits the benefit for the unspent portion.

Only for the reinvestment window of the relevant section: broadly 2 years to purchase and 3 years to construct a house under Section 54/54F, 2 years under 54B, and 3 years under 54D/54G. If any amount is still unused when the window ends, that unutilised amount is taxed as capital gain in the year the period expires.

Any amount left in the account after the reinvestment window expires is treated as capital gain of the previous year in which the period ends and is taxed at the rate applicable to that original gain. So you should either complete the reinvestment in time or plan for the tax that will fall due on the leftover balance.

No general extension is available. The 2-year purchase and 3-year construction windows are fixed by statute. Some courts have taken a lenient view on delayed possession in genuine builder-default cases, but you cannot rely on that. Plan to complete the purchase or construction within the prescribed period.

Type A is a savings-style account you can withdraw from as needed — ideal for staged payments to a builder. Type B is a term deposit that earns higher interest but must be converted back to Type A before you withdraw. Choose Type A for under-construction property with multiple payments, and Type B when a single future lump-sum purchase is planned.

Yes. Interest credited on both Type A and Type B is taxable as income from other sources in the year it accrues, and normal TDS on bank interest applies. Only the capital gain itself is exempt when reinvested in time — the interest earned on the parked money is always taxable.

CGAS accounts are offered by nationalised banks and specified scheduled banks such as SBI, PNB, Bank of Baroda, Canara Bank and other major banks. Post offices are not authorised for CGAS. You open the account at a bank branch, not online-only, and declare which exemption section the deposit relates to.

Typically PAN, Aadhaar, address proof and photographs, plus details of the asset sold — date of sale, sale value and the capital-gain amount — and the exemption section you are claiming. You open the account using Form A and specify whether you want Type A (savings) or Type B (term deposit).

Form A opens the account; Form B converts a Type B term deposit to Type A; Form C (and Form D for subsequent withdrawals) is used to withdraw funds; and Form G closes the account with the Assessing Officer's approval once reinvestment is complete. Amounts withdrawn must generally be utilised within 60 days or redeposited.

You deposit the unutilised capital gain (Section 54) or net sale consideration (Section 54F) not yet reinvested. From AY 2024-25, however, the deposit that counts towards the Section 54/54F exemption is capped at Rs 10 crore — amounts above this do not earn additional exemption. For most individual taxpayers the cap is not a constraint.

Under Section 54F the exemption is based on investing the net sale consideration, not just the gain, so you deposit the unutilised portion of the net consideration into CGAS. Under Section 54 you deposit the unutilised capital gain. Getting this right matters, because a shortfall reduces the exemption proportionately under 54F.

In the capital-gains schedule of your ITR (ITR-2 or ITR-3), report the sale, compute the gain, and claim the Section 54/54F/54B exemption, showing the amount deposited in the CGAS account before the due date. Retain the CGAS passbook and deposit proof; you must demonstrate timely deposit and later utilisation if the return is examined.

No. If you have already purchased or constructed the new asset before the return due date, you claim the exemption directly and do not need CGAS. The scheme is only for the unspent portion that remains uninvested at the filing date but which you intend to reinvest within the statutory window.