On November 19, the Ministry of Finance notified the Capital Gains Accounts (Second Amendment) Scheme, 2025, marking the most significant update to the CGAS since 1988. The revision introduces digitalisation, wider applicability and simplified compliance for taxpayers, NRIs and businesses claiming exemptions under Sections 54, 54B, 54D, 54F, 54G, 54GA and 54GB of the Income-tax Act.

 

The Capital Gains Accounts Scheme (CGAS) continues to protect exemption claims when capital gains cannot be immediately reinvested, allowing unutilised funds to be deposited in a designated account. This remains crucial for real-estate transactions and complex reinvestment timelines. A major change is the recognition of electronic payment modes for CGAS deposits. Earlier limited to cheque and demand draft, deposits can now be made through credit/debit cards, net banking, UPI, IMPS, RTGS, NEFT and BHIM Aadhaar Pay. The date of deposit is now clearly defined as the date the electronic payment is received by the deposit office along with the application, removing ambiguity around clearance timing.

 

The scheme has also been expanded to include Section 54GA, covering relocation of an industrial undertaking from an urban area to a SEZ. This brings clarity and structured compliance for businesses and MSMEs shifting operations in phases. The definition of “Deposit Office” has been broadened beyond select PSU banks to include SBI and its subsidiaries, nationalised banks and any bank notified by the Central Government, opening possibilities for greater participation, including private banks.

 

The amendments formally recognise electronic account statements in place of physical passbooks for deposits, withdrawals, verification and closure, aligning the scheme with modern banking practices. From April 1, 2027, CGAS account closures will become fully digital. Forms G and H must be submitted electronically using DSC or EVC, with systems managed by the Principal Director General of Income-tax (Systems).

 

This will significantly benefit NRIs by eliminating the need for physical interaction with tax authorities. Updated forms such as Form A and Form C now capture online transaction details like RTGS, IMPS and NEFT numbers, ensuring consistency with the new payment framework. Overall, the 2025 amendments modernise CGAS by enabling online deposits, expanding coverage, strengthening verification and moving towards fully digital lifecycle management. These changes enhance efficiency, certainty and accessibility, supporting India’s broader vision for a transparent, taxpayer-friendly digital compliance ecosystem. (The author is a practising chartered accountant)