What's CGAS?

CGAS (Capital Gains Accounts Scheme, 1988) lets an assessee temporarily park capital gains in a designated account when the amount has not been used to buy or construct the replacement asset by the income-tax return filing date under the applicable exemption provision. The deposit must be made by the relevant section’s due date, and the money must later be used within that section’s prescribed period; otherwise, the unutilised amount may become taxable.

• Where to open: With an authorised branch of a bank notified by the Central Government for CGAS—not every bank branch offers it. The State Bank of India and its authorised branches are among the permitted options; confirm the current authorised-bank/branch list with the bank before applying. Deposits are generally available as Account A (savings) or Account B (term deposit).
• How it works: Make the deposit in the prescribed form and retain the passbook/deposit documents. Withdrawals from Account A are subject to scheme conditions; Account B must be closed or converted as prescribed. Amounts withdrawn must be used for the specified purchase/construction, with unspent withdrawals redeposited as required. Rules differ by exemption section.
• Interest: It is not a single CGAS rate. Interest is set by the bank and depends on the account type, tenure and applicable bank terms; ask the authorised branch for its current CGAS rate and tax treatment.
• Loan/contingency: A CGAS balance is restricted and is not a normal freely withdrawable deposit. The scheme does not provide a general facility to borrow against it; withdrawals are controlled and must be applied to the qualifying purpose. Check the applicable section and scheme conditions before relying on the funds for contingency.

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