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<h1>Forfeiture of Section 54F exemption occurs when disqualifying property acquisition, non utilisation of deposited gains, or early transfer happens.</h1> Forfeiture of the Section 54F exemption occurs when: (1) a second residential house is acquired or constructed within the specified statutory periods, causing the exempted gain to be taxable when income from that house is chargeable; (2) amounts in the Capital Gain Account Scheme are not utilised to acquire or construct the new house within the prescribed periods, in which case unutilised deposits are deemed long term capital gain when the three year limit expires; or (3) the new house is transferred within three years of acquisition or construction, making the exempted gain taxable in the year of transfer.