CAPITAL GAIN EXEMPTION FOR HUF

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This discussion clarifies capital gains tax exemption for Hindu Undivided Families (HUFs) selling property held for over 10 years. The sale consideration should be deposited into the HUF's account, not a member's. Exemption is available by investing in specified capital bonds under Section 54EC, with a maximum limit of Rs 50 lakh per assessee. While bonds have a lock-in period (now 5 years for NHAI/REC), the funds must be utilised within 3 years to purchase or construct another property.

SHAMNHU NATH TRIVEDI

SHAMNHU NATH TRIVEDI (Querist)

29 February 2020 One of my Client is a HUF . IF IT Sells one Property Holding For a period of more than 10 years, My Query is
1. Whether Sale Consideration may be taken in the accounts of One of Members of HUF?
2. Whether Exemption may be available to HUF if Amount Invested in Capital Bond?
3. Whether any Limit of Investment in CAPITAL BOND?

Eswar Reddy S

Eswar Reddy S (Expert)

01 March 2020 1.No.If there is any practical issue then atleast try to get into karta Account and should deposit later into HUF Account 2.Yes. 3.6months from the date of transfer but should be utilised within 3 years to buy or construct another property

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

02 March 2020 I would like to add here that if Bonds are purchased then its lock up period is now 5 years ( NHAI and REC Bonds ). You may refer Section 54EC. Maximum limit Rs 50 lacs for an assessee. Please deposit the sales consideration in HUF 's Account only and then transfer to the member so that reply of any subsequent query as regards the investment as well as sales consideration can be given in a simple manner. You may further refer the following article -https://taxguru.in/income-tax/section-54ec-deduction-capital-gain-income-tax-act.html

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