Section 54F Cap: Is Your ₹10Cr LTCG Exempt?

Sold shares or gold and want to avoid capital gains tax? Section 54F lets you reinvest in a house — but if you park that money in a Capital Gains Account and miss the deadline, the taxman comes knocking.

Here's what happened: Section 54F exempts Long Term Capital Gains on non-residential assets (stocks, gold, plots) if you buy or build a new house within set deadlines.. If the house isn't purchased immediately, gains must be deposited in a Capital Gains Account Scheme (CGAS) at a designated bank to protect the exemption temporarily.. Any amount left unused in the CGAS account after the reinvestment deadline — 2 years for purchase, 3 years for construction — becomes fully taxable as LTCG in that year..

What you should do: Check your CGAS deposit date immediately — calculate your 2-year (purchase) or 3-year (construction) deadline and mark a calendar alert.. If reinvestment looks unlikely, consult a CA about filing a revised return or paying advance tax to avoid interest penalties under Section 234B.. Compare whether full reinvestment of gains (not just the capital amount) is feasible — Section 54F requires the entire sale proceeds to be invested, not just the profit..

Section 54F is stricter than Section 54 — you must invest the ENTIRE sale proceeds (not just gains) to claim full exemption. Invest less, and your exemption is proportionally reduced.