HUF is holding a property since FY 2011-12 on which it had claimed Section 54 exemption. Now if the property is transferred to one co-parcener under distribution (FY 2012-13) Whether there will be any tax liabilty or not.
Thanks in advance.
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Section 54
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offcourse tax liabilty will arise in the sense that previouly claimed exemption will be added back to the total income. But if HUF has held the same for 3 years after investment u/s 54, then HUF can freely transfer. Most impotrant to note here is that co-parcner and HUF both have independent status undr I.T Act so transfer by HUF to co-parcner will be enough ground for Assessing Officer to reverse the earlier allowed exemption...because in sec 54 the words are used as that assess should not transfer the propert for a minimum 3yrs period ...
Dear Saurabh,
Can u provide me the Text where it is written that the earlier exemption will be reversed.
According to my understanding as per Sec 54 the cost of the new asset is reduced with the exemption amount.
Yes Kapil you are right, thanks for correcting me.....
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