54f

Tax planning 264 views 7 replies

Respected All, 

                     I have a plot A which is in the name of my huf. I want to sell this plot and use a part of the proceeds to construct a house on plot B which is in the name of individual. I went to a lawyer and he said that I can not get exemption under section 54 F. Is he right. ?  Also if he is right,  can I transfer the plot B in name of huf by way of gift before selling plot A. And then after selling plot A,  use a part of the proceeds to construct house on plot B. Then will I be able to get an exemption under section 54 F.  Also the other conditions of the section are satisfied. Please let me know. 

Thanxxx in advance :) 

Replies (7)

The lawyer is correct. You can gift plot B before or even purchase it from ownself to HUF, to utilize more sell proceeds from sell of plot A.

Sir, that means after that I will be able to get Exemption under section 54 f for construction of house. . ? ? 

Yes, you can, provided HUF does not own more than one house on the date of sale of plot A. Secondly, you just need to make a deed of permission of use on long term of plot B, by individual to HUF.

Thank you very much sir.. :) Just one last question, does that mean I don't have to execute a gift deed..?? Because a hefty amount of stamp duty is charged on gifts. . 

Yes, just permission to use or long term lease deed will be sufficient for land part.

Thank you very much sir. .  

Really appreciate it. 

Have a good day. .  :) 

Thanks and very good luck.


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