e-Circular

PBU - PREMIER BANKING SERVICES

Sl. No. : 1205/2012 - 13
Circular No. : NBG/PBU/PREM-CAMPAIG/4/2012 -
13
Monday, March 04, 2013.
.

The Chief General Manager

State Bank of India
All Circles

Madam/ Dear Sir,

MASTER CIRCULAR
SBI CAPGAINS PLUS – UNDER CAPITAL GAINS ACCOUNTS SCHEME 1988

Our Bank is among the few banks authorized by the Income Tax Department to
accept deposits under Capital Gains Accounts Scheme 1988 (CGAS) representing
capital gains or sale proceeds of long term capital assets. (Only public sector banks
can offer this deposit scheme). This special account, named ‘SBI CapGains Plus’ in
our Bank, can be opened as a Savings Bank account or a Fixed Deposit account
(TDR or STDR).

2. As on date two important circulars have been issued with regard to this product.
These are PDM/Circular No. 9 of 2003-04 dated 31.07.2003 issued by Product
Development & Marketing Department and our Circular No. NBG/PUU/LIMA-
CAPGAIN/27/2007-08 dated 14.01.2008. Considering the importance of this product,
a source of large value deposit business, we are issuing this Master Circular
consolidating instructions issued so far in respect of this product and incorporating
the instructions of the Income Tax Department under the Capital Gains Accounts
Scheme 1988.

3. While product codes were earlier available for Savings Bank category (Public &
staff), now, new codes have been developed for SB (NRE & NRO) as well as TDRs
and STDRs. With immediate effect any CapGains Plus account type– whether SB,
TDR or STDR – must be opened only under the relevant product code. This is
necessary essentially from an Audit perspective. Further, for any campaigns run to
incentivise business mobilisation, only accounts opened under Capgains product
codes would be considered.
4. Certain very important features are captured below:

a) Setting up of SB account (Account A) is mandatory.

b) No Cheque book or ATM card is to be issued to the CapGains SB account.

Further, these accounts would be barred for on-line opening or for
conducting transactions in INB and would be available for viewing only.

c) Fixed deposit withdrawals to be routed through CapGains SB account.

d) Cash withdrawals only upto Rs.25,000. Withdrawals above Rs.25,000 is

allowed only by way of way of issuance of a crossed DD / banker’s cheque
drawn in favour of the person to whom the depositor intends to make the
payment.

e) Branches should open a separate file for filing copies of all forms,
certificates submitted by the customers. This is necessary to be in
readiness to respond to any queries from Income Tax Dept at any later
date.

3. Please bring the contents of this circular to the knowledge of all officials / staff
members working in branches / offices under your control for popularization of this
deposit product amongst our customers.

All the forms to be used under the scheme (Form A to Form H) are appended in the
form of Annexure.

Yours faithfully,

Chief General Manager (PB)

 INDEX

SL. NO. DESCRIPTION

1 Capgains Plus Scheme - Introduction

2 Product description & Product Codes

3 Important Guidelines on SBI Capgains Plus Scheme

4 Various Forms used under Capital Gains Scheme + formats

5 Original notification on Capital Gains Account Scheme, 1988

with latest IT Amendment notification No. 44/2012 dated
25.10.2012
 1. CAPGAINS PLUS SCHEME - INTRODUCTION

CAPITAL GAIN SCHEME 1988

Sections 54, 54B, 54D, 54F, 54G and 54GB of the Income-tax Act, 1961, provide for
exemption of capital gains tax for a seller if the seller / assessee utilizes the amount of
capital gain or net consideration for specified purposes. In the event of the assessee not
utilising the amount for the specified purposes, before the date of furnishing the return, then
the Act provides for the assessee to deposit such sum in specified banks and defer
utilisation of the sum as laid down under the Act but within clearly defined timelines.

SBI’s CAPGAINS PLUS:

Only Public Sector banks are allowed to accept deposits under Capital Gain Scheme 1988.
In our Bank the account is named ‘Capgains Plus’.

TYPES OF ACCOUNTS:

There shall be two types of deposit accounts, namely :

(i) Savings Bank Account (Deposit Account-A); and

(ii) Term Deposits (TDR / STDR) (Deposit Account-B)

™ 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.

™ 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.
Withdrawals under this account can be allowed in the manner stipulated under the
scheme.

Investment of Sale proceeds of Capital Assets for exemption from Capital

Gains Tax under provisions of Sec 54 of Income Tax Act.

Section Capital Asset Sold Capital Asset Sold Specified Specified

Asset in which sale time period
proceeds for reinvestment
are required to be re-
invested
54 Residential House Residential House 3 Years
54 B Land used for Land used for agricultural 2 Years
agricultural Purposes
Purposes

54 D Compulsory acquisition Land or Building for 3 Years

of shifting/re-establishing
 land or Building forming / setting up an industrial
part undertaking
of an industrial
undertaking

54 F Any capital asset Residential House

(Other than residential 2 Years
house)
54 G Machinery or Plant or New machinery or plant or 3 years
building or land of an building or land or shifting of
industrial undertaking the assets
situated in an urban
area for shifting of such
industrial undertaking to
any
Area (Other than an
urban
area)
54 GB Capital gain on transfer Where,— Before the due
of residential property (i) the capital gain arises from date of furnishing
not to be charged in the transfer of a long-term of return of
certain cases capital asset, being a income under
sub-section (1) of
residential property (a house
section 139.
or a plot of land), owned by
the eligible assessee (herein
referred to as the assessee) ;
and

(ii) the assessee, before the

due date of furnishing of
return of income under sub-
section (1) of section 139,
utilises the net consideration
for subscription in the equity
shares of an eligible company
(herein referred to as the
company) ; and

(iii) the company has, within

one year from the date of
subscription in equity shares
by the assessee, utilised this
amount for purchase of new
asset,
 2. PRODUCT DESCRIPTION
REF. SHORT TITLE
NO.
1 Product Name
2 Eligible Applicants
4 Minimum Amount
5 Period of Deposit
6 Interest Rate
6a Senior Citizens
6b No differential Rate of
Interest for bulk deposits
ITEM DESCRIPTION
SBI CAPGAINS PLUS
a) Resident Individuals, Body of individuals
b) Non-individuals like Hindu Undivided family
(HUF), sole proprietorship firms; partnership
firms companies, Association of persons etc
c) Non-resident Indians (NRIs)
d) Resident but not Ordinary Resident (RNOR)
e) Artificial judicial persons who have capital gains,
taxable in India.
Rs. 1,000 in case of CapGains Term Deposits
Not exceeding 2 to 3 years from the date of
transfer of original asset as given below-
Max 24 months - if capital gains is U/s 54B,
54 F. 54 G (As declared in Form A by
depositor)
Max 36 months - if capital gains is U/s 54, 54 D
(As declared in Form A by depositor)
As applicable to normal Savings and Term
Deposits for respective maturities - Irrespective of
ticket size (i.e, no differentiation between regular &
bulk deposits) .
Senior citizens, aged 60 years and above, will NOT
be eligible for additional interest as permitted for
domestic term deposits of similar maturity.
In other words, deposits received from senior
citizens under the scheme will also carry the
same rate as applicable to general public.
The benefit of varying / differential rates of interest
on single term deposits of Rs. 15 lakh and above,
permitted in terms of para 2.26 (c), of the Master
Circular on Master Circular on Interest Rates on
Rupee Deposits held in Domestic, Ordinary
Non-Resident (NRO) and Non-Resident
(External) (NRE) Accounts dated
02.07.2012 issued by RBI, are not applicable to
deposits of similar size / maturity under the Capital
Gains Account Scheme. 1998.

6c Interest on Staff Accounts
7 Authorised Branches
8 Closure / Premature
Payment
9 Loan facility
10 Charge or alienation
11 Provision of Interest
12 Nomination
13 Tax Deducted at Source
In other words, banks cannot offer higher/
differential rate of interest on deposits received
under the Capital Gains Accounts Scheme,
1988.
Payment of higher rate of interest on deposits from
members of the Bank’s staff / pensioners, as
applicable to other deposit schemes, is permitted
under this Scheme.
The Scheme is operative at all branches except
rural branches.
Closure of Savings bank Account (Account – A)
and closure of TDR/STDR (Account – B) allowed
before maturity. (Proceeds to be credited to CapGains
SB a/c Account A only).
At the time of final closure of all accounts the
depositor will have to produce specific authority
letter/ certificate from the Income Tax Officer
having jurisdiction and the closure would be
allowed on the terms mentioned in the letter of
authority.
No loan facility against this deposit is available
This term deposit can neither be accepted as
margin money for non-fund based nor as collateral
to any type of fund-based / non-fund based
facilities
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
The procedure of provision of interest on TDR /
STDR / SB under Capital Gains deposit will be
same as that applicable to Term Deposits / SB
Accounts.
Upto 3 Nominees
TDS shall be deducted as per the existing rules in
this regard. The procedure for this will be same as
that for TDRs / STDRs opening under this scheme.
Forms 15G & 15H can be accepted, wherever
submitted by depositor, and TDS waived
accordingly
 PRODUCT CODES FOR CAPGAINS PLUS - SB ACCOUNT TYPE
SBNCHQ-CAP-PUB-IND-
ALL-INR 1121 1401
SBNCHQ-CAP-STF-IND-
ALL-INR 1121 3401
SBNCHQ-NRO-CAPGAIN-
PUB-IND-INR 1113 1401
SBNCHQ-NRE-CAPGAIN-
PUB-IND-INR 1114 1401

PRODUCT CODES FOR CAPGAINS PLUS - TDR & STDR ACCOUNT TYPES
BELOW 15 LACS
181D TO 241D TO < 2YR
07D TO 90D 91 TO 179D 180 D 240D IYR 1YR TO<2YR TO<3YR 3 YRS
GEN PUB INDIV 3111 1311 3111 1701 3111 1711 3111 1721 3111 1731 3111 1741 3111 1751 3111 1761
GEN PUB OTHERS 3111 2311 3111 2701 3111 2711 3111 2721 3111 2731 3111 2741 3111 2751 3111 2761
GEN STF 3111 3311 3111 3701 3111 3711 3111 3721 3111 3731 3111 3741 3111 3751 3111 3761
NRO INDIV 3113 1311 3113 1701 3113 1711 3113 1721 3113 1731 3113 1741 3113 1751 3113 1761
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
NRE INDIV X X X X X X X X X X 3114 1151 3114 1161 3114 1171

XXX XXX XXX XXX XXX XXX

GEN PUB INDIV X X X X X X 3611 1531 3611 1541 3611 1551 3611 1561 3611 1571
XXX XXX XXX XXX XXX XXX
GEN PUB OTHERS X X X X X X 3611 2531 3611 2541 3611 2551 3611 2561 3611 2571
XXX XXX XXX XXX XXX XXX
GEN STF X X X X X X 3611 3531 3611 3541 3611 3551 3611 3561 3611 3571
XXX XXX XXX XXX XXX XXX
NRO INDIV X X X X X X 3613 1531 3613 1541 3613 1551 3613 1561 3613 1571
 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
NRE INDIV X X X X X X X X X X 3614 1151 3614 1161 3614 1171

15 LACS AND BELOW 1 CR

181D TO 241D TO < 2YR
07D TO 90D 91 TO 179D 180 D 240D IYR 1YR TO<2YR TO<3YR 3 YRS
GEN PUB INDIV 3111 1001 3111 1011 3111 1021 3111 1031 3111 1041 3111 1051 3111 1061 3111 1071
GEN PUB OTHERS 3111 2001 3111 2011 3111 2021 3111 2031 3111 2041 3111 2051 3111 2061 3111 2071
GEN STF 3111 3001 3111 3011 3111 3021 3111 3031 3111 3041 3111 3051 3111 3061 3111 3071
NRO INDIV 3113 1001 3113 1011 3113 1021 3113 1031 3113 1041 3113 1051 3113 1061 3113 1071
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
NRE INDV X X X X X X X X X X 3114 1051 3114 1061 3114 1071

XXX XXX XXX XXX XXX XXX

GEN PUB INDIV X X X X X X 3611 1031 3611 1041 3611 1051 3611 1061 3611 1071
XXX XXX XXX XXX XXX XXX
GEN PUB OTHERS X X X X X X 3611 2031 3611 2041 3611 2051 3611 2061 3611 2071
 XXX XXX XXX XXX XXX XXX
GEN STF X X X X X X 3611 3031 3611 3041 3611 3051 3611 3061 3611 3071
XXX XXX XXX XXX XXX XXX
NRO INDIV X X X X X X 3613 1031 3613 1041 3613 1051 3613 1061 3613 1071
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
NRE INDIV X X X X X X X X X X 3614 1051 3614 1061 3614 1071

BULK DEPOSIT (1 CR AND ABOVE)

91D TO 181D TO 241D TO < 1YR TO <2 2YR TO <3
07D TO 90D 179D 180D 240D 1YR YR YR 3 YR
GEN PUB INDIV 3161 1711 3161 1721 3161 1731 3161 1741 3161 1751 3161 1761 3161 1771 3161 1781
GEN PUB OTHERS 3161 2711 3161 2721 3161 2731 3161 2741 3161 2751 3161 2761 3161 2771 3161 2781
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
GEN STF X X X X X X X X X X X X X X X X
NRO INDIV 3163 1711 3163 1721 3163 1731 3163 1741 3163 1751 3163 1761 3163 1771 3163 1781
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
NRE INDIV X X X X X X X X X X 3164 1151 3164 1161 3164 1171
 XXX XXX XXX XXX XXX XXX
GEN PUB INDIV X X X X X X 3661 1711 3661 1721 3661 1731 3661 1741 3661 1751
XXX XXX XXX XXX XXX XXX
GEN PUB OTHERS X X X X X X 3661 2711 3661 2721 3661 2731 3661 2741 3661 2751
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
GEN STF X X X X X X X X X X X X X X X X
NRO INDIV 3663 1711 3663 1721 3663 1731 3663 1741 3663 1751
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
NRE INDIV X X X X X X X X X X 3664 1151 3664 1161 3664 1171
 3. IMPORTANT GUIDELINES ON SBI CAPGAINS PLUS SCHEME
Instructions: Explanation

Account Opening Form A) If the depositor is already a customer of

( KYC compliance) the Bank

Form – A (in duplicate) Proof of Address + Copy of

PAN Card + Photograph + unstamped HUF Letter in
case of account is that of a HUF

B) If the depositor is not a customer of the

Bank

Regular Account opening form of the Bank and normal

KYC requirements to be met. Further, Form – A (in
duplicate) Proof of Address + Copy of PAN Card +
Photograph + unstamped HUF Letter in case of account
is that of a HUF

Opening of CapGains SB account (Account ‘A’) is

important as the scheme provides for withdrawals from
Opening of Capital Gains accounts opened under TDR / STDR (Account – B) either
on maturity or on pre-mature closure only through
SB Account (Account – A) Account A. Therefore, proceeds of Capgains TDR/STDR
& (Account B) will have to be routed through Capgains SB
TDR / STDR (Account – B) a/c (Account-A).

As such, branches must open a Capital Gains Savings

Banks account (viz., Account A) wherever the customers
wish to deposit the amount either as Capgains TDR or
STDR (Account B).

For TDRs/STDRs opened under this scheme, MOD

facility will not be available.

Important: Regular SB account, if any, in the name of

the Capgains Depositor already with the Bank will not
serve as ‘Account-A’ as envisaged under the Scheme.

Such deposits may be made in one lump sum or in

instalments.
a) TDR/STDR ‘Receipts’ in stationery form are to be
issued and not issued as an ‘Advice’. However, a
legend as stated below will have to be affixed on the
deposit receipt.
Printing of deposit form /
receipt /
Issue of SB passbook b) For Capgains SB (Account A), regular SB
passbooks can be issued. However, a legend as
stated below will have to be affixed on the passbook
– on the first page containing the name and account
number of the customer.

A rubber stamp bearing the legend “Deposits under

Capital Gains Account Scheme, 1988. Closure

Issue of duplicate pass book
or receipt
Withdrawal / payment of
amount from Savings Bank
A/c
( Account – A)
subject to conditions governing the Scheme.
Loan facility not available”
In the event of loss or destruction of the pass book /
receipt the Bank may, on an application made by the
depositor to it in this behalf, issue a duplicate thereof.
Withdrawal from CapGains SB a/c (Account A)
1. Withdrawals are permitted from Account A using
FORM-C only.
2. After the first withdrawal, subsequent withdrawals
are permitted only after the customer submits the
details regarding the manner and extent of utilisation
of the amount withdrawn from account on the
previous occasion on Form-D. (If the same is not
furnished, the Bank shall refuse further withdrawals).
The amount withdrawn shall be utilised by the
depositor within sixty days from the date of such
withdrawal and the amount or any part thereof which
has not been so utilised shall be re-deposited in
account-A immediately thereafter.
3. Form-G is used at the time of complete closure of
all Capgain plus accounts held by the customer for
the subject property, duly approved by the Assessing
Officer, I.Tax, of the Assessee’s (depositor’s)
jurisdiction.
4. Form-H is to be used by the legal heirs /
nominees of the deceased customer, duly approved
by the Assessing Officer, I.Tax, of the Assessee’s
(depositor’s) jurisdiction.
IMPORTANT:
a) No ATM debit card or Cheque book can be
issued for CapGains SB account (Account A).
b) Cash withdrawals from Account A only upto
Rs.25,000. Above Rs.25,000 can be paid only
by way of way of issuance of a crossed DD /
banker’s cheque drawn in favour of the
person to whom the depositor intends to
make the payment.
c) Accounts under CapGains are barred from
online opening of account / assigning
Internet Banking transaction rights. (Can
be mapped only for enquiry rights)
Withdrawal from CapGains TDR/STDR (Account
B)
1. Proceeds of TDR / STDR on regular closure /
premature closure can be routed through Account A
only
The proceeds – whether on maturity or premature - must

Closure of Term deposit
(Account-B) on maturity /
premature payment.
Payment of interest on
Capgains TDR
Transfer and Conversion of
the Accounts
Product codes for Savings
Bank & TDR / STDR accounts
Maintaining of separate
records / files for deposits
made under Capgains Plus
Scheme
Nomination by the depositor
be credited only into the depositor’s CapGains SB a/c
(Account A).
On the due date, the amount of Capgains TDR/STDR
(Account-B), with interest will be automatically credited to
CapGains SB account (Account A) of the depositor
(These instructions to transfer to Account A should
be obtained at the time of opening of the CapGains
TDR/STDR). Other maturity instruction options (available
to regular TDR/STDR) will not be available for this
product.
Premature closure: A TDR/STDR deposit can be closed
prematurely or on maturity and part renewed as a
TDR/STDR with the balance credited to CapGains SB a/c
(Account A)
Interest computation / penalty is computed in the usual
manner.
Form-G is used at the time of complete closure of all
Capgain plus accounts held by the customer for the
subject property, duly approved by the Assessing Officer,
I.Tax, of the Assessee’s (depositor’s) jurisdiction.
Periodical interest (quarterly, half yearly etc.,) can be
credited to regular SB account of depositor. Calendar
quarter option will NOT be available for this product.
Transfer of accounts from one Branch to another Branch
of same Bank is permitted.
The customer also has the option of conversion of
amount deposited under CapGains SB (Account A) to
CapGains TDR/STDR (Account B) and vice versa freely
using form C.
Account Description Capgains Plus TYPE SUB
Scheme TYPE
SBNCHQ-CAP-PUB IND-ALL-INR
1121 1401
SBNCHQ-CAP-STF IND-ALL-INR
1121 3401
SBNCHQ-NRO-CAPGAIN-PUB-IND-INR 1113 1401
SBNCHQ-NRE-CAPGAIN-PUB-IND-INR 1114 1401
TERM DEPOSITS Please Refer
Annexure - 2
SPECIAL TERM DEPOSITS
• Branches should maintain proper records of all
the accounts opened under Capgains Plus
scheme.
Nomination facility is available for the deposits (maximum
3 nominees). However settlement of proceeds in the
event of demise of account holder cannot be paid
equitably to all nominees. The following procedure / steps
will have to be observed.
 (1) A depositor may nominate in Form E, 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) 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.

(3) 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 :

In case of cancellation or change in nomination, Form “F”

has to be submitted.

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.
Deceased Cases If nomination is registered:

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 with the approval of the
Assessing Officer who has jurisdiction over the
deceased depositor, and the Branch 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.

If no nomination is registered:

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 of
the legal heir.

Provided that where there are more than one legal heirs
of the deceased depositor, the legal heir making the claim
 individually may do so by producing the letter of
disclaimer or letter of 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 (Income Tax Dept) 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. DIFFERENT FORMS USED UNDER CAPITAL GAINS SCHEME

FORM PURPOSE
A Application for opening an account under the Capgains Plus Scheme
B Application for conversion of accounts from TD to SB or Vice Versa
C Application for withdrawal of amount
D Details regarding the manner and extent of utilisation of amount withdrawn
E Form of Nomination
F Application for cancellation or change of Nomination
G Application for closing the Account by depositor
H Application for closing the account by nominee / legal heirs of depositors
 5. CAPITAL GAINS ACCOUNTS SCHEME, 1988
[GSR 724(E), DATED 22-6-1988]

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 and sub-section (2) of section 54G of
the Income-tax Act, 1961 (43 of 1961), the Central Government hereby frames the following
Scheme, namely :

Short title, commencement and application.

1. (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, 54B, 54D, 54F or
54G of the Income-tax Act, 1961 (43 of 1961).

Definitions.

2. 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 depo-sitor, under this Scheme;

(f) depositor means an assessee who is eligible to make a deposit under section 54, 54B, 54D,
54F or 54G 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.

Deposits how to be made.

3. A deposit or deposits may be made under the provisions of section 54 or section 54B or section
54D or section 54F or section 54G 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.

Types of deposits.

4. (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
paragraph 7 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.

1
(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.

Application for opening account.

5. (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 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 the 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 deposit under account-A, the deposit office shall issue a pass book 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.
Issue of duplicate pass book or receipt.

6. In the event of loss or destruction of the pass book 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 duplicate thereof.

Transfer and conversion of the account.

7. (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 para- graph 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.

Interest.

8. (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 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 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.

Withdrawal from the account.

9. (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 other 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 depo-sitor, 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 from 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-paragraphs (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
conditions 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).

Utilisation of the amount of withdrawal.

10. (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, 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 from 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.

Nomination by the depositor.*

11. (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 be 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.

Charge or alienation.

12. 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.

Closure of the account.

13. (1) If a depositor 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.

(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 of 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 of
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 or 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.
 5(A) IT AMENDMENT NOTIFICATION

GOVERNMENT OF INDIA
MINISTRY OF FINANCE , DEPARTMENT OF REVENUE
NOTIFICATION , INCOME-TAX
th
New Delhi, the 25 October, 2012

S.O. 2553 (E). - 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,
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 makes the following Scheme to amend
the Capital Gains Account Scheme, 1988, namely:-

1. (1) This Scheme may be called the Capital Gains Accounts (First Amendment)
Scheme, 2012.
(2) It shall come into force on the date of its publication in the Official Gazette.

2. In the Capital Gains Accounts Scheme, 1988 (hereinafter referred to as the said Scheme),
in the opening paragraph, for the words, brackets, figure and letter “and sub-section
(2) of section 54G”, the words, brackets, figures and letters“, sub-section (2) of
section 54G and sub-section (2) of section 54GB” shall be substituted.

3. In sub-paragraph (3) of paragraph 1 of the said Scheme, for the word, figure and letter“or
54G”, the word, figures and letters“, 54G or 54GB” shall be substituted.

4. In clause (f) of paragraph 2 of the said Scheme, for the word, figures and letter“or 54G”,
the figure, letter and words“, 54G or an eligible company as referred to in section
54GB” shall be substituted.

5. In paragraph 3 of the said Scheme, after the words, figures and letter “or section 54G”,
the words, figuresand letters“or section 54GB” shall be inserted.

6. In sub-paragraph (4) of paragraph4 of the said Scheme, after the words “the depositor”,
the words, figures and letters “or the eligible assesse as referred to in section 54GB”
shall be inserted.
7. In sub-paragraph (1) of paragraph 10 of the said Scheme, after the word, figures and letter
“section 54G”, the words, brackets, figures and letter “or sub-section (2) of section
54GB” shall be inserted.

8. In paragraph 13 of the said Scheme,──

(a) in sub-paragraph (1), after the words “If a depositor”, the words, figures and letter
“, other than an eligible company as referred to in section 54GB” shall be
inserted;

(b) after sub-paragraph (1), the following sub-paragraph shall be inserted, namely:-

“ (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 assesse referred to in section
54GB;

(ii) the application shall be made with the approval of the Assessing Officer having
jurisdiction over the eligible assesse 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.”.

9. In Form A to the said Scheme, ──

(a) for the figures, letter and words “*54G of the Act”, the figures, letters and words
“*54G/*54GB of the Act” shall be substituted.

(b) after item 7, the words, figures, letters and brackets “ ** Signature/Thumb
impression of the eligible assesse as referred to in section 54GB of the Act
[applicable in case of section 54GB only]”, shall be inserted.

10. In Form C to the said Scheme, in item 2, after the word, figures and letter “ section
54G”, the word, figures and letter “/* section 54GB” shall be inserted.

11. In Form G to the said Scheme, -

(a) after item 6, the words, figures, letters and brackets “ ** Signature/Thumb
impression of the eligible assesse as referred to in section 54GB of the Act
[applicable in case of section 54GB only]”, shall be inserted.

(b) in the notes, after item 2, the following item shall be inserted, namely:-
“ 3. ** In case the account to be closed pertains to an eligible company as referred to in
section 54GB, the form shall also be signed by the eligible assesse referred to in the said
section.”.
[Notification No. 44/2012/F.No.142/21/2012-SO (TPL)]
Pawan K Kumar
Director to Government of India
Note: - The principal notification was published in the Gazette of India, Extraordinary, Part
nd
II, Section 3, Sub-section (ii), vide number G.S.R. 724(E), dated the 22 June, 1988.