Karnataka Bank launched the Capital Gains Account Scheme on August 28, 2026, providing customers with a compliant avenue for tax planning on capital gains.

The scheme assists taxpayers who have earned capital gains from eligible assets but cannot complete prescribed reinvestments within the stipulated timeframe. By depositing funds into the designated account, holders can avail of tax deferral benefits under the Income-tax Act.

About the Capital Gains Account Scheme

Karnataka Bank is among the authorized banks permitted to offer the scheme. The initiative aligns with the government's decision to expand CGAS availability through additional banking partners, improving accessibility for taxpayers across the country.

Customers can open two types of accounts under the scheme:

• Capital Gains Account-A: A savings deposit account offering flexible deposits and withdrawals.
• Capital Gains Account-B: A term deposit account designed for longer-term parking of funds.

These accounts support eligible reinvestments, including the purchase or construction of residential property and other qualifying investments as permitted by tax regulations.

Key highlights

Sri. Raghavendra S Bhat, Managing Director & CEO, stated that the launch reflects the bank's focus on providing convenient and compliant solutions for effective tax planning and investment decisions.

Customers may visit their nearest Karnataka Bank branch for details on account opening procedures, documentation requirements, and applicable terms.

Karnataka Bank Ltd has been empaneled as an Arranger and Collector for HUDCO Capital Gain Bonds. The appointment strengthens the bank's commitment to offering a comprehensive range of investment solutions to its customers.

With this empanelment, Karnataka Bank joins a select group of arrangers facilitating investments in government-backed Capital Gain Bonds issued by Housing and Urban Development Corporation Limited (HUDCO), Rural Electrification Corporation (REC), Power Finance Corporation (PFC), and Indian Railway Finance Corporation (IRFC). These instruments are issued under Section 54EC of the Income Tax Act, 1961.

Capital Gain Bonds offer eligible taxpayers an opportunity to save tax on long-term capital gains while investing in secure, government-backed instruments. Through this arrangement, customers can conveniently subscribe to HUDCO Capital Gain Bonds across the bank's extensive branch network.

The addition of HUDCO Capital Gain Bonds expands the bank's investment offerings, reflecting its focus on innovative financial products tailored to retail and institutional customers. Customers may visit their nearest branch for detailed information on eligibility, investment limits, subscription process, and applicable terms and conditions.