Deferred LTCG reinvestment for Sections 54/54F/54EC. SBI + Canara Bank. Type A (savings) + Type B (FD). 2-yr purchase / 3-yr construction window. Preserves capital gains exemption.
CGAS = Capital Gains Account Scheme (1988). Government-notified bank account for DEFERRED REINVESTMENT of LONG-TERM CAPITAL GAINS. PURPOSE: When you can't reinvest LTCG immediately (Section 54/54F/54EC require reinvestment within prescribed period), park funds in CGAS to preserve exemption. KEY: (1) DESIGNATED BANK ACCOUNTS (SBI + Canara Bank primarily). (2) 2 ACCOUNT TYPES: Type A (savings — withdrawable) + Type B (fixed deposit — locked). (3) MUST UTILIZE within 2-3 years (Section dependent). (4) Else gains become TAXABLE.
CGAS USE SCENARIOS: (1) PROPERTY SOLD but new house not yet purchased (Section 54): 2 years for purchase, 3 years for construction. (2) ANY CAPITAL ASSET SOLD + invest in new house (Section 54F): same 2-3 year window. (3) BUSINESS LAND/BUILDING sold (Section 54G/54GA): 1-3 year window. (4) WITHIN ITR FILING DUE DATE (July 31): deposit unutilized LTCG to CGAS. (5) CGAS DEPOSIT counted as 'invested' for exemption purposes. EXAMPLE: Sold property June 2026 for ₹2cr gain. By July 31 ITR filing, deposit unused portion in CGAS. Buy new house by June 2028 (2 yr) or build by June 2029 (3 yr).
TYPE A (SAVINGS): (1) Like savings account. (2) WITHDRAWABLE for specific approved purposes (purchase/construction). (3) INTEREST: ~4% (savings rate). (4) Easy to deposit/withdraw. TYPE B (FIXED DEPOSIT): (1) LOCKED for prescribed period. (2) HIGHER INTEREST: ~6-7%. (3) Can convert to Type A for utilization. (4) Less flexible. STRATEGIC: (1) USE TYPE A for upcoming purchases. (2) USE TYPE B for longer-term parking (better returns). (3) MIX: keep portion in each. (4) BANK OPTIONS: SBI Capital Gains Account + Canara Bank Capital Gains Account (primary).
CGAS WITHDRAWAL: (1) ONLY for SPECIFIC purpose declared at deposit. (2) Section 54/54F: house purchase or construction payments. (3) WITHDRAW via cheque or NEFT to seller/contractor. (4) PROVIDE PURPOSE certificate to bank. (5) BANK monitors compliance. (6) UNUTILIZED amount after deadline: TAXABLE as LTCG in year of expiry. (7) UNUTILIZED + WITHDRAWN for non-approved: penalty + taxable. EXAMPLE: ₹1cr CGAS deposit for house purchase. (a) Year 1: ₹50L withdraw for first instalment. (b) Year 2: ₹50L for completion. (c) UTILIZED, exemption preserved. ALTERNATIVE: ₹30L unutilized after 2 years — taxable LTCG that year.
CGAS STRATEGY: (1) PROPERTY SALE without ready purchase: deposit in CGAS immediately before ITR filing. (2) DOCUMENT purpose carefully — purchase OR construction. (3) MAINTAIN paper trail for withdrawals. (4) PURCHASE: 2 YEARS from sale date. CONSTRUCTION: 3 YEARS. (5) PARTIAL UTILIZATION: claim partial exemption. (6) TYPE A + TYPE B mix optimal. (7) WITHDRAW only for declared purpose — avoid penalty. (8) MULTIPLE CGAS DEPOSITS across separate sales: separate accounts each. (9) DEATH BEFORE UTILIZATION: nominee inherits CGAS. (10) ENGAGE CA for complex CGAS scenarios (multiple sales, mixed assets, NRI). (11) NRI: same rules — open CGAS via Indian bank. PROPER use saves significant capital gains tax.