HDFC Bank can now take capital gains deposits from property sellers

HDFC Bank has received government approval to accept deposits under the Capital Gains Accounts Scheme (CGAS), 1988, the bank said in an announcement on 4 November 2026. The scheme lets people who have sold property or other eligible assets keep their unused capital gains in a designated account, earn interest on the money, and seek a tax exemption on it while they wait to reinvest.

Who can use the account

The facility is open to resident Indians who sell residential property, agricultural land or other qualifying capital assets and cannot reinvest the gain before the income tax return filing deadline. It also covers certain industrial assets that are compulsorily acquired, or moved from urban areas to non-urban locations or Special Economic Zones. Non-residents must open a separate non-resident account, known as NRCGAS.

Short-term capital gains do not qualify. The exemptions under Sections 54 to 54GB apply only to long-term gains, so a short-term gain cannot be parked under this scheme.

• Minimum opening deposit of ₹1,000, then any amount in multiples of ₹1, with no upper limit.
• Two options: Type A savings accounts and Type B fixed deposits.
• Deposits can be made through NEFT, RTGS, IMPS, UPI and other banking channels.
• Available at urban and semi-urban branches. Rural branches are excluded.
• View-only access through net banking and mobile banking. Savings account holders get passbooks; fixed deposit holders get deposit advice.

Interest, tax and deadlines

The bank says both account types pay interest quarterly. That interest is taxable under the normal rules. The bank will deduct tax at source and issue a TDS certificate to the depositor.

The deposit has to be made before the return is filed and not after the due date for filing it. Reinvestment must then happen within the time limit set by the scheme. The framework sets 24 months or 36 months depending on the section under which the gain is claimed, and funds can stay deposited for up to three years. The bank has stated that the exemption remains subject to applicable tax rules and reinvestment conditions. A deposit is a holding place for the money, not the exemption itself.

For a seller who has not yet found a new property, the practical step is to check the reinvestment deadline against the return filing date before deciding how much to deposit. Any shortfall in the reinvestment can change the tax position, so a tax adviser's view on the specific sale is worth getting.

The change also widens access. Until recently, the facility was available almost only at public sector banks and IDBI Bank, outside rural branches. Under Finance Ministry notifications effective from 19 November 2025, 19 private banks, including HDFC Bank, were brought into the scheme. Deposits in those notifications are accepted only at branches in areas with a population above 10,000 as per the 2011 Census, and UPI, NEFT, IMPS and credit cards were added as deposit channels.

What happens next

HDFC Bank has not announced a go-live date or a list of participating branches. Sunali Rohra, the bank's Head of Government and Institutional Liabilities, welcomed the authorisation and said it would let customers earn interest and claim tax exemptions while depositing unused gains securely. Buyers and sellers should confirm the branch network and account opening process with the bank before planning a deposit. Tax commentary on the Finance Ministry changes also says that from 1 April 2027, the closure of CGAS accounts will move to a fully electronic process using digital signatures or EVC.