Policy Update
HDFC Bank gets nod to accept Capital Gains Account Scheme deposits
HDFC Bank has received government authorisation to accept deposits under the Capital Gains Accounts Scheme, 1988, the bank announced on Wednesday, 4 November 2026. The scheme lets eligible taxpayers park capital gains they have not yet reinvested while they seek tax exemption on them.
| Announced | Wednesday, 4 November 2026, by HDFC Bank (as of 5 November 2026) |
|---|---|
| Scheme | Capital Gains Accounts Scheme (CGAS), 1988 |
| Account types | Type A savings accounts and Type B fixed deposits |
| Minimum deposit | Rs 1,000, then in multiples of Re 1, with no upper limit |
| Holding period | Up to three years, depending on the relevant tax provision |
| Branch coverage | Urban and semi-urban branches; rural branches are excluded |
| Who can use it | Resident Indians; non-residents must open an NRCGAS account |
| Reinvestment window | Up to 24 months or 36 months, depending on the section under which the gain is claimed |
What happened
HDFC Bank has received approval from the Government of India to offer deposits under the Capital Gains Accounts Scheme (CGAS), 1988. The bank said the facility will let individuals who sell property or other eligible assets earn interest on capital gains they cannot reinvest before the income tax return filing deadline, while seeking tax exemption on those gains.
The bank made the announcement in a statement on Wednesday, 4 November 2026. HDFC Bank's Head of Government and Institutional Liabilities, Sunali Rohra, welcomed the authorisation and said the initiative would let customers earn interest and avail tax exemptions while securely depositing unutilised capital gains.
How the account works
Under the scheme, taxpayers can deposit unutilised capital gains in designated bank accounts and claim exemptions under applicable provisions of the Income-Tax Act, subject to prescribed conditions. HDFC Bank is offering two options:
- Type A: savings accounts, with interest paid quarterly, according to the bank.
- Type B: fixed deposits, also with interest paid quarterly, according to the bank.
Funds can be transferred through NEFT, RTGS, IMPS, UPI and other banking channels, according to a Free Press Journal report on the announcement. Account holders will be able to view their accounts through HDFC Bank's mobile and net banking platforms. Savings account holders will receive passbooks, and fixed deposit holders will receive deposit advice.
Which gains qualify
The scheme covers capital gains from residential property, agricultural land and other qualifying capital assets. It also covers certain industrial assets that are compulsorily acquired or relocated from urban areas to non-urban locations or Special Economic Zones.
Short-term capital gains are not eligible. The exemptions under Sections 54 to 54GB of the Income-Tax Act apply only to long-term capital gains.
Under the 1988 scheme framework, a taxpayer who cannot reinvest capital gains in specified assets before filing the return of income, while the time limit for that investment has not expired, must deposit the unutilised amount in a Capital Gain Account before filing the return. The deposit must be made no later than the due date for filing the return.
Tax on interest and the caveat
Interest earned on both Type A and Type B deposits is taxable. Tax will be deducted at source by the deposit office, and a TDS certificate will be issued to the depositor.
The bank has stated that the actual exemption remains subject to applicable tax rules and reinvestment conditions. The account does not by itself make a gain tax-free.
Background: the wider expansion of the scheme
A Finance Ministry notification effective 19 November 2025 extended the scheme to 19 private banks, and HDFC Bank is among them. Before this change, the facility was available almost exclusively in public sector banks and IDBI Bank, except at rural branches. The 2025 changes also allowed deposits through digital methods such as UPI, NEFT, IMPS and credit cards.
Under that expansion, deposits are accepted only at branches located in areas with a population above 10,000, based on the 2011 Census.
What it means for sellers, buyers and investors
For sellers of residential property or agricultural land, the account offers a place to hold unreinvested gains until the reinvestment window closes. It does not change the reinvestment deadlines, which still apply.
A Whalesbook assessment, which is not an official statement, says the expansion could increase liquidity and operational scope for private sector banks and may lead to wider participation in the scheme.
What comes next
- Reinvestment deadlines continue to apply. Per the 1988 scheme framework, the limit is a maximum of 24 months for gains under Sections 54, 54B and 54F, and 36 months for gains under Sections 54, 54D, 54F, 54G and 54GB, as declared by the depositor in Form A.
- From 1 April 2027, closures of CGAS accounts will move to a fully electronic system using digital signatures or EVC. This change is described by a tax advisory firm's commentary on the Finance Ministry changes, not by HDFC Bank.
HDFC Bank has not announced a branch list or a launch date for the new deposits beyond the authorisation itself.
Frequently asked questions
Can I use the scheme for short-term capital gains?
No. Short-term capital gains are not eligible. The exemptions under Sections 54 to 54GB apply only to long-term capital gains.
What is the minimum amount I can deposit?
The minimum is Rs 1,000, and further deposits can be made in multiples of one rupee with no upper limit, according to the scheme terms reported for HDFC Bank.
Is the interest I earn on these deposits taxable?
Yes. Interest on both Type A and Type B deposits is taxable. Tax is deducted at source by the deposit office, and a TDS certificate is issued to the depositor.
Can non-resident Indians open this account?
The facility is currently available to resident Indians. Non-residents must open a non-resident CGAS account (NRCGAS).
Which branches of HDFC Bank offer the facility?
According to the bank, the facility is offered through its urban and semi-urban branches. Rural branches are excluded.