What are the circumstances in which exemption under section 54 can be withdrawn?
The exemption claimed by assessee under s​ection 54 can be withdrawn in the following circumstances:
(a) Amount deposited in capital gains scheme account is not utilized in prescribed time limit: Where the amount deposited is not utilized for purchasing a residential house property within 2 years or construction of house property within 3 years from the date of transfer, the un-utilized deposit in capital gain account scheme is deemed to be long-term capital gains in the year in which the prescribed time limit expires.
(b) Transfer of new house within 3 Years: If the new house is sold before a period of 3 years from the date of its purchase/completion of construction, then at the time of computation of capital gain arising on transfer of the new house, the amount of capital gain claimed as exempt under s​ection 54 will be deducted from the cost of acquisition of the new house.