The scheme serves customers who have made a profit from selling assets such as land or a house but are not ready to reinvest. If their income-tax return filing deadline comes before the planned reinvestment, they can place the funds in a designated account to preserve their claim to an exemption under income-tax law.

Customers can choose between two account formats. Account-A operates as a savings deposit, offering flexibility for withdrawals. Account-B follows a term-deposit structure and is intended for customers who want to leave the money deposited for a fixed period. Interest rates and detailed withdrawal conditions have not been stated in the report.

The launch follows the government's move to widen the group of banks authorised to conduct CGAS business. Karnataka Bank joins those permitted to provide the facility, with the expansion intended to improve access to tax-planning products across India.

Managing Director and CEO Raghavendra S. Bhat linked the introduction to the bank's effort to offer useful customer solutions and support tax planning. The bank also sees the service as a way to strengthen customer relationships and its wealth-management offering.