Home Loan to HUF

You can take the housing loan on your individual name and invest on behalf of the HUF, in such case the amount taken will be a loan to the HUF.

To do so, I think, you will have to be the Senior most male member of the HUF (Karta). But remember the amount invested in the house property in this way will also belong to the HUF.

Better to seek a partition suit, if you have brothers / You are not the karta / and want to keep your above said property as your self accured property. (It will prevent Your next generation from cursing you for not doing so.)

CORRECTION :

But remember the house property constructed in this way will also belong to the HUF.

@ Ritesh,

I am finding it a little confusing to understand clearly due to your language  style.

Does your query means as below ........... ?

1/ You sold a HUF property.

2/ You will take a housing loan from Bank.

3/ Next You will blend both the amount in a new house for the HUF.

4/ The provisional certificate issued by Bank at the end of FY will not have HUF mentioned in it, as it's your personal loan in their view.

5/ You want to know that,  can You use it in the IT Return being filed for the HUF

Did i understand you clearly, or am i wrong somewhere above ?

Tell me something first, are you the Senior most male member of the HUF ?

Sir,

The HUF has the following members Self, Wife, my two kids.

I am therefore the senior most male member of the HUF.

What you have mentioned in Para 1 - 5 is correct and exactly defines my query.

@ Ritesh,

The HUF property that you sold, was it a Ancestral Partioned / Joined with YOUR Brothers / sisters, 

or was it your self accured property ?

Are your two kids minor, or they live saperatly, or has their own IT files ?

sir,

I had inheritted a property as a kid from my grand father, which was sold by my parents.
  the money was invested in bonds. once they matured I bought the property as HUF.

I take it this is what you mean as self accrued.

Now I am selling it. Registry to be done in 15 days time.  I am digging this info so that I can take the money in correct account.

my kids are minors and stay with me, they do not have separate ITR filed.

In fact the HUF is for tax benefits only not for anything else. it is a happy family staying together.

@ Ritesh,

The IT dept. treats an Individual & a HUF as two saparate body.

Understanding your situation, I think, the best solution for you.. would be as follows.

You said that you have an IT file for the HUF. Let me assume that you too have one IT file on your own Personal name.

So,

1/ Take a Loan from Bank on your Personal Name.

2/ Transfer the amount to the HUF's account, only by an Account Payee Cheque from your account.

3/ On the other side, withdraw the said amount as a Karta of the HUF.

(If required, You can also authorize someone else from your HUF to act as the Karta, on behalf of the HUF. But to do so I think, you will have to perform some Legal paperworks)

This is a little bit Tricky, but it will work for the IT benefit you seek. The Argument will convert your Personal loan to a Loan taken by the HUF.

Sir,

Sir your assumption is correct I have an IT file as an indl too.

I think what you suggest will not work, as the loan to HUF is not being given as per ruling by IBA and will be given in the name of self and wife as joint applicants only when the booked property is in the joint name and not HUF (The origin of the Query).

The disbursement of the loan amount will be to the builder only as it is home loan not personal loan.

If it is personal loan then the home loan tax benefits are not there thus beating the purpose of the whole exercise.

Therefore transfer to HUF ac through RTGS / cheque of the disbursed amount as suggested is not possible.

Unless you quote any court ruling on similar precidence / particular section of the law allowing me to invest in the joint names of the Adult members of HUF and still it can be considered on behalf ot HUF.

Since this is the only HUF Property and source of income to HUF / HUF Corpus the only way out for meeting the twin requirement of availing LTCG relieve and invest in property as well utilizing a home loan is:

liquidate HUF before sale.

split sale proceeds amongst members.

adult act as trust holders for minors.

buy property in joint name of adult members.

the adult members enjoy tax benefits under sec 22 in individual capacity.