Exemption us54 by HUF on Purchase of Property

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This discussion addresses whether a Hindu Undivided Family (HUF) can claim an exemption under Section 54 of the Income Tax Act when purchasing a residential property using funds derived from the sale of shares held by the HUF. The query clarifies that the capital gains from the share sale were directly reinvested into the property purchase, supported by bank statements. The consensus is that HUF is indeed eligible for this exemption.

Gaurav

Gaurav (Querist)
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20 March 2024 Hello Members,

Client purchased a new residential flat. He sold off the shares he had in this private ltd company, apart from his self shares he also sold shares held in HUF.
Query: There is Long Term Capital gain coming from the sale of Shares in HUF, while the proceeds received from this was directly used for the purchase of the flat, Can HUF claim deduction us 54 as flat was purchased out of such proceed which is evident from bank statement also.

Regards
Gaurav