Deposit of funds under Capital Gains Account Scheme

The assesse can avail exemption from Capital gains by depositing the funds from capital gains in an
account opened under Capital Gain Account Scheme (CGAS). This account can only be opened with any
of the 28 approved Banks as authorized by the Government Of India.

Form A has to be filled and submitted to the bank along with following necessary documents: Copy of
PAN Card, address proof and photograph.

Two types of accounts can be opened in this scheme.

1. Account A - CGAS Savings Account: This is similar to a regular savings account. Interest will be
credited periodically and funds can be withdrawn at any time for the specific purpose only.
2. Account B - CGAS Term deposit Account: This is similar to fixed deposit of maximum tenure of 3
years. A deposit certificate would be issued. Auto renewal of this deposit is not allowed unlike
Fixed deposit. This can be cumulative or non-cumulative. The interest rates are decided by RBI.
Premature withdrawal under this account is allowed, but will be charged to penalty.

Closure of both accounts requires approval from jurisdictional income tax officer. NO loan can be
obtained against a CGAS account. The term deposit certificate can neither be offered as a collateral
security or as a guarantee, nor can any charge be created on the same.

Please note that interest earned on any account is taxable and TDS will be deducted on the same by the
bank.

Also, any amount either unutilized beyond 60 days of withdrawal or beyond specified time limit of
Income tax section will be liable to tax.