Capital gains exemption withdrawn if replacement asset is sold early or deposited funds remain unused, causing recapture as capital gain.

Exemption under section 54F is withdrawn where the replacement asset is disposed of within the prescribed holding period, reducing the asset's cost by the previously exempted capital gain and classifying the subsequent gain by holding period; unutilised deposits in a capital gains account scheme become taxable as capital gain in the year the utilisation period lapses, retaining the original gain's character.

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