Huf and ancestral property
vikram
(Querist) 20 May 2015
This query is : Resolved
Dear Experts,
I would like to have some advice or face to face consultation for HUF related issues.
My scenario is as follows:
We have an property inherited from my grand father and which was inherited by my father and his brothers. My father died last year without any will so we have to register my and my mothers name on the 7/12 extract. Based on advice from CA to avail tax benefits I have formed an HUF with I as karta of HUF . Is it possible to put my HUF name on 7/12 document and my mother to gift her share to HUF willingly ? If so could you please provide procedure to that. Thank you very much in advance.
Anirudh
(Expert) 20 May 2015
What is the benefit that you expect to derive by forming the HUF in regard to the property?
vikram
(Querist) 20 May 2015
Hi Anirudh,
I am expecting to have some tax savings in long term from that property in terms of rent or even sale.
-Vikram
Anirudh
(Expert) 20 May 2015
Even HUF is liable to capital gains in the event of sale of the property.
Therefore, I am not able to understand exactly what benefit that your CA told you that you will derive in the HUF, especially in your given fact situation.
vikram
(Querist) 20 May 2015
If I am going to earn rent out of this property then I will be able to get tax savings as it wont added to my income as individual. Yes capital gain will do apply in case of sale but then still it can be same scenario if I own property as individual.
Anirudh
(Expert) 20 May 2015
How much rent you will be earning from that portion of the property in a year? What will be the tax impact on the remaining income after allowing the usual 30% deduction?
Please remember by putting the property into HUF, you are making your individual separate absolute property as property of your sons/daughters, who will claim their right by birth.
Choice is yours.
Kumar Doab
(Expert) 20 May 2015
The matter is properly explained.
You may choose as it suits you.
