Capital Gains Accounts Scheme 1988 – [Notification No. GSR 724(E), dated 22-6-1988 reported in 172 ITR (St.) 54]
- Under the Capital Gains Accounts Scheme, 1988, “depositor” is defined to mean an assessee who is eligible to make a deposit under sections 54, 54B, 54D, 54F or 54G of the Income-tax Act, 1961.
- “Deposit Office” means the bank notified by the Central Government to receive deposit and maintain account of the depositor. For notified bank, See Notification No. GSR 725(E), dated 22-6- 1988 reported in 172 ITR (ST.) 74.
- Every depositor who is desirous of opening account(s) for the first time, shall apply to the deposit office in Form A in duplicate together with the amount of deposit to be paid either in cash or by crossed cheque or by draft. Such deposit can be made in one lump sum or in instalments at any time on or before the due date of furnishing the return of income. For availing benefit of exemption from capital gains under more than one section, depositor has to make separate applications for opening accounts under each of such sections. There are two types of deposit accounts (1) “Deposit account-A” in the form of ‘saving deposit’, and (2) “Deposit account-B” in the form of “term deposit” with an option to keep the deposit as cumulative or non-cumulative. A depositor has an option to open any of these accounts or both. Nomination in respect of an account can be made by the depositor, who is an individual, in Form E. For the deposit under account-A, deposit office will issue passbook. For the deposit under account-B, deposit office will issue a deposit receipt.
- For the deposit made under account-A, interest at the rate of specified by the Reserve Bank of India will be allowed for each calendar month on the lowest balance between the close of 10th day and end of the month and credited to the account at the end of each half-year. For the deposit made under account-B, interest at the rate specified by the Reserve Bank of India will be allowed.
- A depositor having a deposit in account-B can convert the said account into account-A by applying in Form B. Account can be transferred from one branch to another branch of the same bank.
- Application in Form C has to be made in respect of first withdrawal from account-A and for subsequent withdrawals from the said account in Form D in duplicate stating therein the manner and extent of utilisation of the amount of immediately preceding withdrawal. The amount so withdrawn has to be utilised by the depositor, within 60 days from the date of withdrawal, for the purposes specified in section 54, or 54B or 54D or 54F or 54G. The amount which has not been so utilised is to be re-deposited in account-A immediately thereafter. Similarly, withdrawal from account-B will also be allowed provided the depositor has converted the said account into account-A.
- For closure of account, an application has to be made, with the approval of the Assessing Officer, to the deposit office in Form G. Similarly nominee or legal heir also can close the account of the deceased depositor by applying in Form H.