CGAS: 19 Private Banks Cleared for Capital Gains Accounts
Why in the news
The Finance Ministry widened access to the Capital Gains Account Scheme (CGAS) by approving 19 private banks. Rural branches (centres under 10,000 people, 2011 census) still cannot accept deposits.
Key changes
- Section 54GA added: gains from moving industrial undertakings from urban areas to SEZs may be parked in CGAS.
- Section 54 context: LTCG tax is exempt on sale of a plot or old house if reinvested in a new house or specified assets, buying one year before or two years after, or constructing within three years.
About CGAS
- Run by the Ministry of Finance; lets taxpayers deposit gains they cannot reinvest immediately and still claim exemption.
- Basis: Sections 54, 54B, 54D, 54EC, 54F, 54G and 54H of the Income Tax Act, 1961.
| Point | Account-A | Account-B |
|---|---|---|
| Type | Savings deposit | Term deposit |
| Withdrawal | Any time | After maturity only |
| Interest | Savings rates | Term rates |
Term deposit rules
- Minimum ₹1,000; no cap; lump sum or instalments.
- Tenor up to 2-3 years from transfer; minimum 7 days or 6 months by option.
- Auto-closure at maturity; 1% penalty for early withdrawal.
- No loans, margin money or collateral use.
Exam angle
- Private banks added: 19.