Capital Gain Account Scheme Section 54 - citizen guide 2026

Ramesh sold his Pune flat in March 2026 with a long-term gain of ₹40 lakh. He wants to buy a bigger house, but he has not found the right one yet, and his ITR is due in a few months. If he does nothing, that ₹40 lakh becomes taxable. The Capital Gain Account Scheme is the legal “parking slot” that saves him.

The Capital Gains Accounts Scheme, 1988 (CGAS) is a scheme framed by the Central Government under the Income-tax Act. It lets you place unutilised capital gains in a designated account at an authorised bank so you do not lose your exemption while you search for, buy, or construct the new asset. It is a holding account, not a permanent shelter, and the money must eventually go into the new house.

Two exemption sections create the need for CGAS:

• Section 54 gives an exemption when you sell a long-term residential house and reinvest the gain in another residential house. You can purchase the new house within 1 year before or 2 years after the sale, or construct it within 3 years of the sale.
• Section 54F gives an exemption when you sell any other long-term capital asset (shares, land, gold and so on) and invest the net sale consideration - not just the gain - in a residential house, within the same purchase and construction timelines. If you invest less than the full net consideration, the exemption is only proportionate.

The bridge is the deposit rule. Section 54(2) and Section 54F(4) say that any amount you have not actually used for the new house before the due date of filing your return under Section 139(1) must be deposited in a CGAS account on or before that due date. Only then can you claim the exemption in the year of sale. The scheme itself is framed under the powers given by Section 54(2), Section 54B(2), Section 54D(2), Section 54F(4) and Section 54G(2).

There are two account types under the scheme:

• Account A - a savings-type deposit. You can withdraw from it from time to time, so it suits ongoing construction or staggered payments.
• Account B - a term-deposit account, cumulative or non-cumulative, which can be withdrawn only after the chosen term ends. It earns more but is less liquid.

1. Work out your deadline. Find the due date for filing your return under Section 139(1) for the year you sold the asset. Your CGAS deposit must be made on or before this date.
2. Calculate the unutilised amount. For Section 54 it is the part of the gain you have not yet spent on the new house. For Section 54F it is the part of the net sale consideration you have not yet spent.
3. Pick an authorised bank. CGAS accounts are opened at branches of authorised banks (most public-sector banks offer them, often branded “Capital Gains” deposit accounts).
4. Choose Account A or B. Use Account A for liquidity during construction; use Account B if you can lock the money for a fixed term.
5. Open the account with Form A and deposit the unutilised amount in one lump sum or instalments, on or before the due date.
6. Claim the exemption in your return, mentioning the deposit.
7. Withdraw and spend the money on the new house within the Section 54 or 54F time limit, using the scheme's withdrawal forms.

• PAN card
• Proof of the sale (sale deed or transfer document) and the capital-gain computation
• Duly filled Form A (application to open a CGAS account)
• Passport-size photographs and KYC documents the bank requires
• Cheque or transfer for the deposit amount

• Missing the due date. A deposit one day after the Section 139(1) due date does not save the exemption.
• Depositing only the gain under Section 54F. Section 54F needs the net sale consideration, not just the gain.
• Treating CGAS as permanent. If you never buy or build, the parked money is taxed later (see below).
• Using the wrong bank account. An ordinary FD or savings account is not a CGAS account; the exemption needs the designated scheme account.
• Forgetting proportionality. Under Section 54F, investing only part of the consideration gives only part of the exemption.

If the deposited amount is not used to buy or build the new house within the time limit, the unutilised amount is charged to tax as a capital gain in the year in which that period expires. So CGAS buys you time, but the clock does not stop.

You cannot file an RTI against a private bank - RTI applies only to public authorities. But you can file an RTI to a public-sector bank or to the Income-tax Department, or a grievance to the RBI Ombudsman or income-tax e-Nivaran, if a CGAS withdrawal is wrongly blocked or an exemption is wrongly disputed.

To: The Central Public Information Officer
[Name of public-sector bank], [Branch]

Subject: Request for information under the Right to Information Act, 2005

Sir/Madam,
Under Section 6 of the RTI Act, 2005, please provide:
1. The internal procedure and forms your branch follows to process a withdrawal
   from a Capital Gains Accounts Scheme, 1988 account.
2. The date my withdrawal request dated ______ (Account No. ______) was received
   and the current status of that request.
3. The name and designation of the official handling Capital Gains account
   withdrawals at this branch.

I enclose the application fee of Rs.10. Please send the reply within 30 days.

Yours faithfully,
[Name, address, phone]

If the bank is private, or the dispute is about service, lodge a complaint with the RBI Integrated Ombudsman at https://cms.rbi.org.in instead. If the Assessing Officer disputes your exemption, raise a grievance through income-tax e-Nivaran on the e-filing portal.

No. If you reinvest the required amount before your return due date, there is nothing unutilised to deposit. CGAS is only for the part you have not yet spent.

On or before the due date for filing your income-tax return under Section 139(1) for the year in which you sold the asset.

Account A is a savings-type account you can withdraw from any time. Account B is a term deposit, withdrawable only after its term ends, and usually pays more interest.

Section 54 applies when you sell a residential house and reinvest the gain. Section 54F applies when you sell another long-term asset and invest the net sale consideration in a house.

The unutilised amount in the account is taxed as a capital gain in the year the reinvestment period expires.

A withdrawal must follow the scheme's rules. If it is wrongly delayed, escalate to the bank's grievance officer and then to the RBI Integrated Ombudsman at https://cms.rbi.org.in.

For Section 54 it is the unutilised capital gain. For Section 54F it is the unutilised net sale consideration.

• Capital Gains Accounts Scheme, 1988 (notified by the Central Government under Section 54(2) and related sections of the Income-tax Act, 1961)
• Income-tax Act, 1961 - Section 54, Section 54F, and Section 139(1)
• Reserve Bank of India - Integrated Ombudsman Scheme, 2021 (https://cms.rbi.org.in)
• Income-tax Department e-Nivaran grievance facility (https://www.incometax.gov.in)

• AI RTI Drafter - draft your RTI in minutes
• First Appeal Builder - if your RTI reply is unsatisfactory
• AwaazRTI - file an RTI using your voice
• The RTI Act 2005 - full text and guide
• The RTI Playbook - the complete citizen handbook

This is general information, not tax advice. Confirm current timelines and limits with a tax professional or the Income-tax Department before acting.