Net sale consideration on transfer of a long-term plot of land is Rs 9 crore, yielding capital gains of Rs 4.5 crore. Before the return due date the assessee spends Rs 5 crore on one new residential house and deposits Rs 3 crore in the Capital Gains Accounts Scheme. The exemption under section 54F is:

1. Under section 54F, amounts utilised plus CGAS deposits form the deemed cost of the new house: Rs 5 crore + Rs 3 crore = Rs 8 crore. 2. The deemed cost is within the Rs 10 crore cap, so no curtailment. 3. Full exemption needs the entire net consideration (Rs 9 crore) invested; only Rs 8 crore is, so relief is proportionate. 4. Exemption = LTCG x deemed cost / net consideration = 4.5 x 8 / 9. 5. That equals Rs 4 crore. 6. Option B assumes full exemption though Rs 1 crore of consideration stayed uninvested; option D confuses the amount spent with the exemption; option C has no basis in the formula. Note the 54F base is net consideration — under section 54 the same facts would exempt the whole Rs 4.5 crore. _Source: ICAI CA Inter P3(A) Income-tax SM (May 2026), Ch 3 Unit 4 Capital Gains, PDF p. 77_