Capital Gains Account Scheme Amendment 2025: A Complete Breakdown of the New Digital Framework for Capital Gain Tax Exemptions

The Ministry of Finance has issued the Capital Gains Accounts (Second Amendment) Scheme, 2025 through a notification dated 19 November 2025, bringing one of the most comprehensive updates to the Capital Gains Account Scheme (CGAS) since its introduction in 1988. These amendments mark a major shift towards digitalisation, broader applicability and streamlined compliance for taxpayers, NRIs and businesses reinvesting capital gains under Sections 54, 54B, 54D, 54F, 54G, 54GA and 54GB of the Income-tax Act.

The Capital Gains Account Scheme exists to ensure that taxpayers who intend to claim capital gain exemptions but are unable to invest the amount immediately can deposit the unutilised funds into a designated account. This protects the exemption claim and provides an organised mechanism for tracking utilisation. With real-estate transactions becoming larger and timelines more complex, the Scheme plays a critical role in ensuring compliance.

The 2025 amendment introduces a wide set of reforms, the most important being the recognition of electronic payment modes for CGAS deposits. Previously, deposits could only be made via cheque or demand draft, often causing delays, clearance issues and compliance discrepancies. The amended scheme formally defines “electronic mode” to include credit cards, debit cards, net banking, IMPS, UPI, RTGS, NEFT and BHIM Aadhaar Pay. For the first time, taxpayers—especially NRIs and remote filers—can deposit capital gains into CGAS instantly through online banking. The effective date of deposit is now clarified as the date the electronic payment is received by the deposit office along with the application, bringing certainty and eliminating disputes around cheque clearance dates.

Another significant change is the expansion of CGAS to Section 54GA, which deals with capital gain exemptions for shifting an industrial undertaking from an urban area to a Special Economic Zone (SEZ). Until now, this section was not linked with the CGAS mechanism, often creating difficulties for businesses undergoing phased relocation. By including Section 54GA throughout the scheme and the related forms, the Government has streamlined the compliance process for industrial undertakings and MSMEs transitioning to SEZs.

The amendment also redefines and broadens the term “Deposit Office.” Earlier, CGAS accounts could only be opened with select PSU banks. The amended definition includes the State Bank of India, its subsidiaries, all corresponding new banks under the Banking Companies (Acquisition and Transfer of Undertakings) Acts, and any banking company notified by the Central Government. This opens the door for more banks—possibly private banks—to operate CGAS accounts, improving accessibility and service quality for taxpayers across India and abroad.

A notable modernisation is the acceptance of electronic account statements in place of physical passbooks. Several paragraphs of the Scheme now recognise “electronic statement of account” as a valid document for deposits, withdrawals, verification and closure. This is a practical change, considering that many banks have moved away from issuing physical passbooks.

One of the most future-focused reforms is the mandatory digital closure of CGAS accounts from 1 April 2027. Under the newly inserted provisions, closure requests (Form G for withdrawal and Form H for utilisation/closure) will have to be furnished electronically using a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC). The Principal Director General of Income-tax (Systems) will design the digital process, routing, approval mechanism, verification standards and data security protocols. This aligns CGAS with the Income Tax Department’s broader e-governance framework and will be particularly beneficial for NRIs who earlier faced challenges in submitting physical forms and engaging with Assessing Officers in person.

The scheme’s forms—specifically Form A and Form C—have also been updated to include online transaction details such as RTGS, IMPS and NEFT numbers, reflecting the adoption of electronic payment methods. This ensures consistency between the operational procedures and the documentation structure.

The practical impact of these amendments is wide-ranging. For NRIs, the move to electronic deposits and digital statements significantly reduces compliance hurdles. Real-estate sellers benefit from clarity on the effective deposit date, faster processing and the elimination of cheque-related delays. Businesses relocating to SEZs under Section 54GA now enjoy a streamlined mechanism to safeguard capital gain exemptions. Banks also gain a more uniform and digitalised compliance environment.

Overall, the Capital Gains Accounts (Second Amendment) Scheme, 2025 represents a major leap towards a modern, digital, transparent and taxpayer-friendly capital gains compliance system. It simplifies deposits, expands applicability, strengthens verification and brings the entire lifecycle of a CGAS account into an electronically governed structure. As India continues progressing toward a fully digital tax administration ecosystem, these reforms are timely, necessary and aligned with the broader vision of seamless taxpayer services.