Exemption of LTCG on sale of shares in subsequent years

This query is : Resolved

Quick Summary

An assessee earning LTCG from shares plans to claim exemption under Section 54F by investing sale proceeds in a residential house and depositing funds in the Capital Gains Scheme. Exemption can also be claimed for LTCG arising in subsequent years, subject to Section 54F conditions and prescribed timelines.

Suraj

Suraj (Querist)
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29 May 2026 Dear Sir / Madam

Under Section 54F of the Income Tax Act, 1961, an assessee can claim exemption on long-term capital gains arising from the sale of assets other than a residential property. To avail this exemption, the assessee must invest the entire sale proceeds in a new residential house property, not just the capital gain.

In the present case, there is a long-term capital gain of ₹2.5 lakhs from the sale of long-term shares, with a total sale consideration of ₹10 lakhs. The assessee plans to purchase a new residential house property in FY 2026–27 for ₹1.5 crore, with possession expected to take at least three years.

Accordingly, he will deposit the sale consideration into the Capital Gains Scheme (CGS) account for later utilization.

My question is: Can the assessee avail long-term capital gain exemption on the sale of long-term shares in subsequent years as well, if he has LTCG in Year 2 and Year 3?

Regards,
Suraj