Capital Gains Tax Relief Process Simplified Under New Digital Amendment Scheme

Capital Gains Tax Relief Process Simplified Under New Digital Amendment Scheme

Ministry of Finance has announced a new update to the Capital Gains Accounts Scheme, 1988, introducing wider digital payment options and modernizing procedural rules for taxpayers claiming capital gains exemptions under the Income-tax Act.

The changes were published in the Official Gazette of India on November 19 through S.O. 5293(E), titled the Capital Gains Accounts (Second Amendment) Scheme, 2025.

The notification expands the scheme to cover provisions under Section 54GA, adding it alongside existing sections such as 54, 54B, 54D, 54F, 54G, and 54GB. One of the most notable changes is the inclusion of a full set of electronic payment modes that depositors can now use while opening or operating Capital Gains Accounts.

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Payments can now be made through credit cards, debit cards, net banking, IMPS, UPI, RTGS, NEFT, and BHIM Aadhaar Pay. Earlier, deposits were limited mainly to cheques and demand drafts.

The Union Government has also widened the definition of “Deposit Office” to include any authorized branch of the State Bank of India, its subsidiary banks, corresponding new banks, and any banking company permitted to handle deposits under the scheme.

All such offices will be responsible for accepting payments through both traditional and electronic methods.

Under the new amendments, the effective date of deposit for claiming capital gains exemption will now be counted from the date the electronic payment is received by the deposit office, subject to successful realization, bringing digital payments on par with cheque-based deposits.

Passbook requirements have also been updated to include electronic statements of account, allowing depositors to use digital records for account operations, withdrawals, and verification.

A major reform will take effect from April 1, 2027, when the closure of Capital Gains Accounts will move entirely to an electronic system. Forms G and H—required for withdrawals and account closure—will need to be filed using digital signatures or an electronic verification code.

The Income Tax Department’s Systems Directorate has been tasked with defining procedures, security standards, and data structures for these electronic submissions.

The notification also updates Form A and Form C to incorporate digital payment references, including RTGS, IMPS, NEFT, and other transaction identifiers, ensuring compatibility with modern banking systems.

This marks the first major update to the scheme since 2012 and is seen as a substantial step toward simplifying compliance, improving transparency, and aligning the capital gains framework with India’s rapidly expanding digital financial ecosystem.