Capital gains bank account with a private bank


Can I open a capital gains bank account with a private bank?



The capital gains account can be opened in any of the 28 banks notified by the government. This includes State Bank of India and other State Banks, Syndicate Bank, Central Bank of India, IDBI Bank, Bank of Baroda and Corporation Bank. However, the CGAS facility is not available in the rural branches of these banks or private banks.

A capital gains account can be opened by filling in and submitting Form A along with proof of address, PAN card copy and photograph. The amount can be deposited in the account through cheque, cash or demand draft. You can even deposit the amount in instalments. If you have made a deposit in the form of a cheque or demand draft, the date of deposit shall be counted from the date on which the cheque or DD is encashed. Additionally, if you intend to invest both in a house and in government bonds under different sections of the Income Tax Act, you need to open separate CGAS accounts.

CGAS– Savings Account:

A capital gains savings account is similar to the regular savings account in any bank. The applicable interest rate is also the same as that given on regular saving schemes. You will receive a passbook that has records of all transactions – deposits, interest received, withdrawals – made in the account. The amount deposited in this account will have high liquidity and can be withdrawn any time.

CGAS– Term Deposit Account:

A capital gains term deposit account is similar to the fixed deposit schemes of banks. The rate of interest and terms for withdrawal before maturity also remain the same as the bank’s FD scheme. So if you withdraw the amount in this account before the end of the tenure that you agreed with the bank you may have to pay premature withdrawal penalty, depending on the terms of the bank. You will receive a deposit receipt that specifies the principal deposited, date of deposit, date of maturity and the interest rate. This account also offers cumulative and non-cumulative options. In the cumulative option, the interest amount is added to the term deposit and reinvested, thereby adding to the total interest accrued. The non-cumulative scheme, on the other hand, allows you to withdraw or receive the interest at regular intervals – quarterly, half-yearly or annually.

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BB Expert