Sold house, land, or shares? Defer tax for two years:Capital gains account lets you park sale profits, earn interest, save tax, and reinvest later

If you’ve sold a property, land, or certain other assets, you might know that any profit you make—called capital gains—is taxable. But what if you haven’t yet found the next property or investment to put that money into? That’s where the Capital Gains Account Scheme (CGAS) comes in. Think of it as a temporary home for your capital gains, where you can safely park the money, earn interest, and still claim tax exemptions under the Income Tax Act. Launched in 1988, this government-backed scheme is a simple way for taxpayers to plan reinvestments without losing the benefit of long-term capital gains exemptions. Here’s an example to show how the Capital Gains Account works Let’s say you sell your house in January 2026 for ₹90 lakh. You had bought this house in 2019 for ₹60 lakh. The profit you make—₹30 lakh—is called long-term capital gain. If you don’t buy another house before filing your income tax return for 2025–26, but you plan to buy one within the next two years, you don’t have to pay tax immediately. You simply need to deposit the unused ₹30 lakh in a Capital Gains Account before filing your tax return, usually by July 31, 2026. Later, when you buy or construct the new house, the payment is made directly from this Capital Gains Account to the seller or contractor. By doing this, you can save tax on the ₹30 lakh capital gain, explains Neeraj. Who Can Use It? Currently, the scheme is available for: Soon, it will also be open to NRIs. Banks like ICICI Bank offer this facility, making it easy to open and manage the account. What Can You Deposit? You can deposit un-invested long-term capital gains or proceeds from the sale of certain assets. Once deposited, the money: Earns interest like a regular savings or fixed deposit account Remains eligible for tax exemption if used for approved reinvestments within the specified time Can be used to buy property, agricultural land, or other approved capital assets depending on the scheme rules Key Benefits Tax exemption: Deposit your un-invested capital gains before the ITR due date to claim exemption on long-term gains. Temporary parking: You get up to three years to plan your reinvestment without losing tax benefits. Interest earnings: Your parked money grows, just like a regular savings account or FD. Flexible reinvestment: Withdraw funds once you have proof of reinvestment in an eligible asset. Premature closure allowed: If needed, the FD can be closed early, following the bank’s policy and CGAS rules. What You Can’t Do While CGAS is useful, some regular banking services are not available: In short, the Capital Gains Account Scheme is a lifeline for anyone looking to save tax while planning their next big investment. Instead of rushing into a new purchase just to save tax, you can safely park your gains, earn interest, and reinvest when the right opportunity comes along.