House property and huf
prithwish sengupta
(Querist) 17 December 2011
This query is : Resolved
Respected sir,
I have purcahsed a house property in my individual name (eg. Mr. Ramesh, religion HINDU),for this purchase i have taken a housing loan from bank of india.
now, i have let this propety out for rent of Rs 15000 p.m.
Following are my queries
1.Can i create a H.U.F.and introduced this house property as capital contribution to the HUF?
2.IF yes, can i claim rental income as income of the HUF?
3. As i am paying the installment in my individual capacity, can i transfer this loan too to the HUF as liability and pay out of income generated from the HUF and claim deduction as per different provisions of I.T.Act?
4. even i pay instalment in my individual capacity for property, am i eligible to claim deduction u/s 80c for principal and Deuction u/s 24 for interest element for HUF income?
Saurabh Bajaj
(Expert) 17 December 2011
Dear Mr. Prithwish,
If you have purchased this house property in the current year, the best solution that you may go for, is to show this property in the ITR of HUF itself so that your other questions can automatically take care of themselves.
You showing in your ITR first and then gifting it to HUF will be taxable in hands of HUF as per the market value of the house property.
Vineet
(Expert) 22 December 2011
1. You cannot create your own HUF by contributing capital. HUF needs underlying corpus coming from an ancestor or gift to the family with specific instructions from members outside the HUF.
2. No bank grants home loan to HUF. Hence, by documentation and conduct property stands in your individual name. Even if you throw it in family hotchpot, which I understand you can't do pending the bank lien, still the income from same will continue to be clubbed in your hand.
3. After transferring property to HUF (if at all), you cannot claim any deduction for interest and u/s 80C for principal as the property has to be in name of claimant.
