cration of HUF property

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2010 I am 47 yrs and inherrited an agrl.land in grampanchayat area and a resi.house in a small town.

That I prepared an Affidavit declaring that the said properties being inherrited may be assumed as My HUF property.
After four months the said agril. Land sold at Rs. 19 lakh and being 10 KM Away from Municipal area it does not attract Capital Gains Tax

I just have Alloted PAN in the name of HUF.
Please guide me whethe my HUF creatio is lawful ?

I also pay Tax in my Individual capasity

My question is whether the Investment in such as FDR from said Sale Prceeds and Interest theron may be treated as of HUF and not of Me in individual capasity?
Is it legal ?

What would be the view of Income TAx authorities ?

Should I file Return in HUF capasity ? though My HUF Income does not attract tax liability ?
What are the Rights of Authorities to Refuse the status of HUF ?

Experts are requested to please guide

Thanks in advance.

M Prabhakar Menon

M Prabhakar Menon (Expert)

11 November 2010 Sale of agricultural land does not attract capital gains provisions of the Income Tax Act 1961, provided all conditions stated therein are satisfied.The sale proceeds of the HUF property will be the receipt of the HUF and will be assessed as such for Income Tax.U have to file the returns for both HUF and as an individual since u represent both and each entity will be assessed seperately.Interest on FDR is not agrl income even though the source of the FDR may be from agriculture income.

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