How to Save Tax on Capital Gains: Anushka Rathod Explains CGAS

Good news for taxpayers! Finance influencer Anushka Rathod explains a simple yet powerful way to save on capital gains tax when you sell an asset and plan to reinvest later.

The Problem:

Imagine you sell an asset and earn ₹30 lakhs in long-term capital gains. If you don't reinvest before filing your Income Tax Return (ITR), you could end up paying ₹3–4 lakhs in tax. That's a big hit if you're still deciding where to invest.

The Solution: Capital Gains Account Scheme (CGAS):

Instead of rushing into a purchase, you can park your gains in a Capital Gains Account Scheme. This move signals your intent to reinvest and keeps your tax exemption under Sections 54 and 54F intact.

Here's How It Works:

You get 2 years to buy a new residential property or 3 years if it's under construction.
Meanwhile, your money earns interest, either as a fixed deposit or savings, depending on the CGAS type.

What's New?

Earlier, only PSU banks like SBI and CBI offered CGAS. Now, 19 private banks have been allowed, giving taxpayers better access, higher interest rates, and improved customer service. This is a game-changer for those looking for flexibility and convenience.

Key Conditions to Remember:

Only long-term capital gains qualify, not short-term.
If you don't use the funds within the time limit, you'll have to pay tax on them.
If you already own more than one residential house (except one bought in the previous year), you may lose the exemption.

Why It Matters:

CGAS is a smart bridge between selling and reinvesting. It not only saves you from immediate tax liability but also gives you breathing room to make the right investment decision, all while earning interest.

Tip: Always check the latest list of banks offering CGAS and confirm interest rates before depositing.
 

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