Is capital gain exemption allowed in huf property if purchased in name of coparcener

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MUKUND

mgr ops

56 Points Joined February 2015

Will capital exemption allowed if property is sold by karta and is purchased in the names coparncer / all members of huf. the pan number used in purchase and selling of property is of that of huf. all the income received by selling the huf property is received in the huf account and new property is acquired using same fund from HUF ACCOUNT the entire sale proceed has used in purchasing the new residential property . Both the sale and purchase deed is executed and signed by the karta of huf

Replies (7)

Manish Manu

198 Points Joined April 2017

Sec 54F of the Income Tax Act mandates that for claiming exemption the property should be purchased by the assessee, however no where in the act it has been stated that the property should be purchased in the "name of the assessee only".

Further, there are various judicial pronouncements which states that if the property is purchased in the name of relative, the assessee will be eligible for exemption u/s 54 or 54F if the property is purchased by the assessee.

In light of the above, it can be opined that the assessee can claim exemption for property sold by him even if the purchase deed is in the name of HUF.

For any further clarification, kindly contact me @ mnshdugar @ gmail.com

Nitesh bind

Student CA Final

12692 Points Joined October 2012

First thing I could see in your case is that Karta has acted as in REPRESENTATIVE CAPACITY and not in his Individual capacity because in sell as well as purchase the PAN of HUF has been Quoted.

Second thing as Mr. Manish said there are various case laws upon this when properties has been purchased in the name of relative and still Deduction has been allowed.

So in my opinion you will be certainly be allowed to claim exemption.

Thanks.