If A transfers to family HUF and then HUF sells it, I am aware that the capital gains would be charged to A in view of the clubbing provision u/s 64. However if the HUF reinvests the Long Term capital gains u/s 54 then the capital gaains for HUF would be Nil. Hence nothing will be addded to the return of A. Is my assessment correct?
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FIFT TO HUF - SEC 64 AND SEC 54 RELATED
Replies (6)
KIndly read FIFT as GIFT in my query posted a while ago.
Thanks
No.
If A invests in property he can claim the LTCG exemption.
A already golds 2 residetial flats and therefore would not be ble to claim benefit u/s 54.
How about HUF reinvesting it?
Thanks
Due to clubbing provision LTCG is assessed under PAN of individual A. How can investment by HUF exempt 'A' liability?.
Moreover under sec. 54 there is no restriction of holding only 2 HP; that provision is u/s. 54F.
Thank you for your reply.
However since it is a plot and not residential house,Sec 54 F would not apply. Another professional has suggested that since HUF would have no LTCG as reinvestment takes place in the name of HUF only, nothing will get added to A.
Not an authentic suggestion, without supporting any rule or case-law.
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