The
following scheme has been framed by issuing Notification No. GSR 724(E), dated
22.06.1988 :- 'In
exercise of the powers conferred by sub-section (2) of section 54, sub-section
(2) of section 54B, sub-section (2) of section 54D, sub-section (4) of section
54F [1][sub-section
(2) of section 54G and sub-section (2) of section 54GB] of the Income-tax Act,
1961 (43 of 1961), the Central Government hereby frames the following Scheme,
namely :- (1)
This Scheme may be
called the Capital Gains Accounts Scheme, 1988. (2)
It shall come into force
on the date of its publication in the Official Gazette. (3)
It applies to all
assessees who are eligible for exemption under section 54, section 54B, section
54D, section 54F [2][54G or
54GB] of the Income-tax Act, 1961 (43 of
1961) In this Scheme, unless the context otherwise
requires,- (a)
"account"
means a deposit account under this Scheme ; (b)
"account-A"
means deposit account-A mentioned in paragraph 4 of this Scheme; (c)
"account-B"
means deposit account-B mentioned in paragraph 4 of this Scheme; (d)
"Act" means
the Income-tax Act, 1961 (43 of 1961); (e)
"Deposit
Office" means any branch or branch office of the State Bank of India,
constituted under the State Bank of India Act, 1955 (23 of 1955), or of a
subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act,
1959 (38 of 1959), or of a corresponding new bank constituted under section 3
of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970
(5 of 1970), or under section 3 of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1980 (40 of 1980), authorised by the Central
Government, by notification in the Official Gazette, to receive deposit and
maintain account of the depositor, under this Scheme; (f)
"depositor"
means an assessee who is eligible to make a deposit under section 54, section
54B, section 54D, section 54F, [3][54G or
an eligible company as referred to in section 54GB] of this Act; (g)
all other words and
expressions used herein but not defined and defined in the Act shall have the
meanings respectively assigned to them in the Act. (h)
"Form" means a
form appended to this Scheme. A
deposit or deposits may be made under the provisions of section 54 or section
54B or section 54D or section 54F [4][or
section 54GB] of the Act by any depositor intending to avail of the benefit
under the said section or sections of the Act, as the case may be, in
accordance with the provisions of this Scheme. (1)
There shall be two types
of deposit accounts, namely :- (i)
"Deposit
account-A" and (ii)
"Deposit
account-B" (2)
The deposit made under
account-A shall be in the form of 'savings deposit' and subject to the other
provisions of this Scheme, withdrawals under this account can be made from time
to time by the depositor. (3)
The deposit made under
account-B shall be in the form of 'term deposit' with an option to the
depositor to keep the deposit as cumulative or non-cumulative deposit. Except as provided under paragraph7 and
paragraph 9, withdrawals under this account can be made only after the expiry
of the period for which the deposit under this account has been made and
accepted. (4)
Such deposits may be
made in one lump sum or in instalments at any time on or before the due date of
furnishing the return of income under sub-section (1) of section 139 of the Act
as is applicable in the case of the depositor [5][or the
eligible assessee as referred to in section 54GB]. (1)
Every depositor who is
desirous of opening an account or accounts, as the case may be, under this
Scheme for the first time, shall apply to the deposit office in Form A or as
near thereto as possible, in duplicate and tender the amount of deposit payable
in the manner specified in sub-paragraph (4) and a depositor intending to avail
of the benefit under more than one section of the Act, as referred to in
paragraph 3, shall make separate applications in the same manner, for opening
account or accounts under each of such sections. (2)
While applying under sub-paragraph
(1) the depositor shall exercise his option as to whether the amount is to be
deposited in account-A or in account-B or in both the accounts, and in the case
of the depositor exercising his option to open account-B, the depositor shall
also exercise his option as to whether the deposit is to be made as cumulative
or non-cumulative deposit as referred in sub-paragraph (3) of paragraph 4. (3)
On receipt of an
application under sub-paragraph (1), the deposit office shall open an account
or accounts in the name of the depositor as opted by him under sub-paragraph
(2). (4)
The payment of amount of
deposit shall be made by the depositor either in cash or by crossed cheque or
by draft along with application. (5)
Every subsequent deposit
shall be made into the deposit office at which the account stands, in the same
manner as stipulated in sub-paragraph (4). (6)
If the deposit is made
by a cheque or a draft then, subject to such cheque or draft being realised,
the effective date of deposit for the purpose of claiming exemption under the
Act will be the date on which the cheque or draft is received by the deposit
office along with the application under sub-paragraph (1) or sub-paragraph (5),
as the case may be. (7)
The interest on the
amount of deposit shall accrue and will be calculated subject to the provisions
of paragraph 8, with effect from the date of deposit in cash or the date of
realisation of the proceeds of the cheque or the draft tendered by the
depositor. (8)
In the case of the
deposit under account-A, the deposit office shall issue a passbook to the
depositor wherein all amounts of deposits, withdrawals, together with interest
due, shall, be entered over the signature of the authorised officer of the
deposit office. (9)
In the case of deposit
under account-B, deposit office shall issue a deposit receipt wherein the
principal amount of deposit, date of deposit, date of maturity of deposit,
shall be entered over the signature of the authorised officer of the deposit
office. In the
event of loss or destruction of the pass book or receipt referred to in
sub-paragraph (8) or sub-paragraph (9) of paragraph 5, the deposit office may, on an application
made to it in this behalf, issue a duplicated thereof. (1)
A depositor may, if he
so desires, apply for transfer of his account or accounts, from one deposit
office to another deposit office of the same bank. (2)
A depositor having a
deposit in account -B may, at any time, if he so desires, apply in Form-B or as
near thereto as possible, together with his deposit receipt, for transfer of
the amount standing to his credit in account-B to his deposit in account-A
opened under the same section of the Act under which the said account-B was
opened and the request of the depositor may be accepted subject to the other
provisions of this Scheme. (3)
(a) A depositor while
applying under sub-paragraph (2) shall furnish in Form-B the requisite
particulars of his account-A to which the amount from account-B is required to
be transferred. (b)
Where the depositor is not having a deposit in account-A, he shall state such
fact and also make a request for opening an account-A in his name, as specified
in Form-B. (4)
If the request under
sub-paragraph (2) has been made for transfer of amount standing to the credit
in account-B, before the expiry of the specified period for which the deposit
in account-B was made, such request shall be treated as premature withdrawal of
amount from deposit in the said account-B and the amount of interest accrued,
if any, in the said account-B shall be calculated by the deposit office in
accordance with the provisions of sub-paragraph (4) of paragraph 8. (5)
If the request under
sub-paragraph (2) has been made for transfer of amount standing to the credit
in account-B on or after the expiry of the specified period for which the
deposit in account-B was made, the amount of interest accrued in account-B
shall be calculated at normal rate as specified by the Reserve Bank of India in
pursuance of paragraph 8 in respect of a deposit in account-B. (6)
On receipt of an
application under sub-paragraph (2), the deposit office shall calculate the
amount of interest, if any, accrued in account-B till the date on which actual
transfer of amount to account-A is made, subject to the provisions of paragraph
8 and close account-B after transferring the total amount standing to the
credit in account-B to account-A: Provided
that where in such case of transfer the depositor does not have a deposit in account-A,
an account-A shall be opened in the name of the depositor and the amount
standing to his credit in account-B shall then be transferred to account-A as
so opened. (7)
A depositor, if he so
desires, may apply in Form-B together with his pass book, for opening an
account-B in his name, by way of transfer of the whole or any part of the
amount standing to his credit in account-A, under the same section of the Act
under which his account-A has been opened. (8)
After the conversion of
account-B to account-A or vice versa in the manner specified above, the
interest in newly opened account or accounts, as the case may be, shall accrue
with effect from the date of opening of such account or accounts. (1)
Interest at such rate as
may be specified by the Reserve Bank of India, from time to time, shall be
allowed for each calendar month on the lowest balance at the credit of a
depositor under the account-A, between the close of the 10th day and the end of
the month and shall be credited to the account at the end of each half year. (2)
Interest at such rate,
as may be specified by the Reserve Bank of India, from time to time, shall be
allowed in respect of deposit in account-B.
In the case of cumulative deposit in account-B, the amount of interest
accrued will be deemed to have been reinvested and in case of non-cumulative
deposit in account-B, the amount of interest will become due and payable at
quarterly intervals. (3)
Interest due at the end
of each half year in respect of account-A will be credited only when the amount
is Re.1 or more and the total amount of interest payable in respect of
account-A or account-B will be rounded off to the nearest five paise. (4)
If a depositor applies
under paragraph 7 or paragraph 9 or paragraph 13 for conversion of the account
or withdrawal from the account or closure of the account, as the case may be,
before completion of the period for which the deposit in account-B has been
accepted by the deposit office, the rate of interest payable in respect of such
deposit shall be the one applicable to the period for which the deposit
remained with the deposit office less one per cent. penalty for a premature
withdrawal on account of such conversion or withdrawal or closure, as the case
may be, and any adjustment required to be made on account of such premature
conversion, withdrawal or closure with respect to amount of interest already
credited to the account of the depositor, shall be made by the deposit office
against the amount lying to the credit of the depositor in account-B. (1)
A depositor having
account-A may, at any time after making the initial subscription, if he so
desires, apply in Form C or as near thereto as possible, together with the pass
book to the deposit office for the withdrawal of amount from the balance to his
credit in account-A, subject to the other provisions of this Scheme. (2)
On receipt of an
application under sub-paragraph (1) the deposit office shall, subject to the
provisions of sub-paragraph (3), permit the withdrawal and enter the amount
withdrawn in the pass book. (3)
At the time of any
withdrawal from account-A, other than the initial withdrawal, the depositor
shall furnish in Form D in duplicate the details regarding the manner and
extent of utilisation of the amount of immediately preceding withdrawal. The
deposit office will retain one copy of Form D and return the copy to the
depositor after duly authenticating it. (4)
Where the amount of
withdrawal referred to in sub-paragraph (2) exceeds rupees twenty-five thousand,
the deposit office shall make payment to the depositor, subject to the
fulfilment of the conditions prescribed in sub-paragraph (3), by way of crossed
demand draft drawn in favour of the person to whom the depositor intends to
make the payment. (5)
A depositor intending to
make withdrawal form his deposit in account-B, shall first apply in the manner
prescribed in sub-paragraph (2) of paragraph 7 for transfer of the amount
standing to his credit in account-B to account-A and may withdraw the requisite
amount in the same manner and subject to the same conditions as stipulated in
sub-paragraph (1) and (3) after the amount standing to the credit in his
account-B has been credited to his account-A by the deposit office. (6)
In case the application
under sub-paragraph (5) is made before the expiry of the specific period for
which the deposit in account-B was made, such withdrawal will be treated as
premature withdrawal, and the amount of interest accrued, if any, shall be
calculated subject to the provisions of sub-paragraph (4) of paragraph 8. (7)
On receipt of the
application under sub-paragraph (5), the deposit office shall transfer the
amount due and payable, together with the amount of interest accrued, in
account-B, to account-A in the same manner and subject to the same conditions
as stipulated in paragraph 7 and thereafter allow the request for withdrawal
made by the depositor in the same manner and subject to the same condition as
stipulated in sub-paragraphs (1), (2), (3) and (4). Explanation.-
For the removal of doubts, it is hereby clarified that the deposit office shall
refuse the depositor to withdraw any amount lying in his account, in case of
failure on his part to furnish all the details as required by sub-paragraph
(3). (1)
A depositor, withdrawing
any amount out of the deposit made in pursuance of sub-section (2) of section
54 or sub-section (2) of section 54B or sub-section (2) of section 54D or
sub-section (4) of section 54F or sub-section (2) of section 54G [6][or
sub-section (2) of section 54GB], shall utilise the whole or any part of the
amount so withdrawn for the purposes specified in sub-section (1) of the
section in relation to which the deposit has been made. (2)
The amount withdrawn
shall be utilised by the depositor within sixty days form the date of such
withdrawal for the purposes specified in sub-paragraph (1) and the amount or
any part thereof which has not been so utilised shall be re-deposited in
account-A immediately thereafter. (1)
A depositor may nominate
in Form E or as near thereto as possible, one or more persons but not exceeding
three to receive the amount standing to his credit in account-A or account-B,
as the case may be, in the event of his death before the amount has become
payable or having become payable, has not been paid. (2)
No nominations shall be
made in respect of an account opened on behalf of a minor or a Hindu undivided
family or a firm or a company or an association of persons or a body of
individuals. (3)
A nomination made by a
depositor may be varied by a fresh nomination in Form F or as near thereto as
possible, by giving notice in writing to the deposit office in which the
account stands. (4)
Every nomination and
every cancellation or variation thereof shall be registered in the deposit
office and shall be effective from the date of such registration, the
particulars of which in the case of a deposit in account-A shall be entered in
the pass book and in the case of a deposit in account-B shall he entered in the
deposit receipt, issued by the deposit office. (5)
If the nominee is a
minor, the depositor may appoint any person to receive the amount due under the
account in the event of the death of the depositor during the minority of the
nominee. (6)
Where the nomination is
in favour of more than one person, the nominee first named shall alone have the
right to receive the amount standing to the credit in the account of the
deceased depositor. (7)
Where the nominee first
named has pre-deceased the depositor and the depositor has not cancelled the
nomination or substituted the nomination, the nominee second named shall be
entitled to receive the amount standing to the credit in the account of the
deceased depositor and so on in respect of other successive nominees: Provided
that if any nominee is dead, the surviving nominee or nominees shall, in
addition to the proof of death of the depositor, also furnish proof of death of
the deceased nominee or nominees, as the case may be. The
amount standing to the credit of any depositor in any account shall not be
placed or offered by him as security for any loan or guarantee and shall not be
charged or alienated in any manner whatsoever. (1)
If a depositor [7][other
than an eligible company as referred to in section 54GB] desires to close his
account, an application shall be made with the approval of the Assessing
Officer who has jurisdiction over the depositor to the deposit office in Form G
or as near thereto as possible, and the deposit office shall pay the amount of
balance including interest accrued, to the credit in the account of the
depositor by means of crediting such amount to any bank account of the
depositor. [8][(1A) If
a depositor, being an eligible company, referred to in section 54GB, desires to
close its account, then, - (i)
it shall make a joint
application signed by the eligible assessee referred to in section 54GB; (ii)
the application shall be
made with the approval of the Assessing Officer having jurisdiction over the
eligible assessee referred to in section 54GB; and (iii)
such application shall
be made in Form G to the deposit office or as near thereto as possible, and the
deposit office shall pay the amount of balance including interest accrued, to
the credit in the account of the depositor by means of crediting such amount to
any bank account of the depositor.] (2)
If a depositor in
respect of whose deposit account a nomination is in force, dies, the nominee,
if he desires to close the account or accounts and obtain the payment of the
balance standing to the credit in the account of the deceased depositor, shall
make an application to the deposit office in Form H or as near thereto as
possible with the approval of the Assessing Officer who has jurisdiction over
the deceased depositor, and the deposit office shall pay the amount of balance,
standing to the credit in the account of the deceased depositor including
amount of interest accrued, by means of crediting such amount to any bank
account of the nominee. (3)
If a depositor, in
respect of whose deposit no nomination is in force, the legal heir of the
deceased depositor shall make an application to the deposit office in Form H or
as near thereto as possible, with the approval of the Assessing Officer who has
jurisdiction over the deceased depositor, and the deposit office shall pay the
balance standing to the credit in the account of the deceased depositor
including the amount of interest accrued, by means of crediting such amount to
any bank account or the legal heir: Provided
that where there are more than one legal heir of the deceased depositor, the
legal heir making the claim individually may do so by producing the letter of
disclaimer or letter or authorisation from other legal heirs in his favour : Provided
further that before granting the approval for closure of the account under this
sub-paragraph, the Assessing Officer shall obtain from the legal heir a
succession certificate issued under Part V of the Indian Succession Act, 1925, or a probate of the will of the
deceased depositor, if any, or letter of administration to the estate of the
deceased in case there is no will in order to verify the claim of such legal
heir to the account of the deceased depositor. (4)
The depositor or the
nominee of the legal heir, in order to obtain payment of the amount standing to
the credit in the account shall while applying in Form G or Form H, also submit
the pass book of account -A or deposit receipt of account-B, as the case may
be, to the deposit office. (5)
The payment made by the
deposit office to the depositor or the nominee or the legal heir in accordance
with the provisions of this paragraph shall constitute a full discharge to the
deposit office of its liability in respect of the deposit. (6)
Nothing contained in
this paragraph or in paragraph 11 shall affect the right or claim which any
person may have against the person to whom any payment is made under this
paragraph. [1]
Substituted by the Capital Gains Account (First Amendment) Scheme, 2012 vide
Notification No. 44/2012 dated 25.10.2012 for the following : - "and
sub-section (2) of section 54G" [2]
Substituted by the Capital Gains Account (First Amendment) Scheme, 2012 vide
Notification No. 44/2012 dated 25.10.2012 for the following : - "or
section 54G" [3]
Substituted by the Capital Gains Account (First Amendment) Scheme, 2012 vide
Notification No. 44/2012 dated 25.10.2012 for the following : - "or
section 54G" [4]
Substituted by the Capital Gains Account (First Amendment) Scheme, 2012 vide
Notification No. 44/2012 dated 25.10.2012 for the following : - "or
section 54G" [5]
Inserted by the Capital Gains Account (First Amendment) Scheme, 2012 vide
Notification No. 44/2012 dated 25.10.2012. [6]
Inserted by the Capital Gains Account (First Amendment) Scheme, 2012 vide
Notification No. 44/2012 dated 25.10.2012. [7]
Inserted by the Capital Gains Account (First Amendment) Scheme, 2012 vide
Notification No. 44/2012 dated 25.10.2012. [8]
Inserted by the Capital Gains Account (First Amendment) Scheme, 2012 vide
Notification No. 44/2012 dated 25.10.2012.CAPITAL GAINS
ACCOUNTS SCHEME, 1988