HINDU UNDIVIDED FAMILY

POSTED BY vivek10093 ON April 18, 2012 4:43 pm COMMENTS (2)

Please advise: Facts of the Case: (i) I am having 1 share for one apartment in cooperative group housing society at Gurgaon. For which I have taken a home loan from IDBI bank in the year 2004 by depositing the original share certificate with the bank .I am availing tax benefits for the interest paid and principal amount . The same apartment is also rented out and i am showing the rent received in my income tax returns. (ii) No conveyance deed of the flat has been carried out by me till date. (iii) There is as scheme floated by central government under the aegis of CGEWHO for housing project at Noida in which there is one condition that central govenment employee must not have any flat/house etc in NCR. (iv) I have made PAN card of my HUF with name VIVEK (HUF) and with the help of this i have also opened a Bank Account for my HUF.

Questions: (i) Whether the status of property will be changed if I blend my self acquired property to HUF? Whether the same is accepted in the eyes of law?
whether blending will make me eligible for participating in the scheme. legally. (ii) Legal procedure to do the same.

2 replies on this article “HINDU UNDIVIDED FAMILY”

  1. vivek10093 says:

    Mr Ashal Replies to your observations is as below:

    (i) First of all i will not gift it to my HUF i will throw/Blend it into my HUF Hotchpot by normal deed of declaration showing intention of blending duly attested by notary public. I am thinking of getting registered in registrar office to be on safer side. however it is not necessary as per law.Gifting and blending is entirely different. what i achieved by this i don’t have to pay gift tax. Now for the property for which i was the sole owner is being owned jointly by my HUF.So i think i am eligible for the scheme launched by government as by doing this myself/my spouse don’t have any property in NCR in individual capacity.

    (ii) Now the point comes of Income Tax: My view is that presently I am in my IT Return showing as below as an individual:
    Assumed Values
    Salary Income=500000
    Income from House property
    Rent Received :150000
    30% deduction: -45000
    Less interest on paid capital=-100000
    Net income from House property=5000
    Less Max limit under section 80 etc=-100000
    Income from other sources=0.00
    Net Taxable income=500000+5000-100000
    =405000
    Now after doing the blending i am planning to file two ITR in the capacity of individual and HUF as Below:
    As an Individual
    Assumed Values
    Salary Income=500000
    Income from House property
    Rent Received :0.00
    30% deduction: -0.000
    Less interest on paid capital=-0.000
    Net income from House property=0.00
    Less Max limit under section 80 etc(Except principal amount of Home loan)=-100000
    Income from other sources(ie from HUF)=-95000
    Net Taxable income=500000+0-100000-95000
    =305000
    As An HUF
    Assumed Values
    Salary Income=0.00
    Income from House property
    Rent Received :150000
    30% deduction: -45000
    Less interest on paid capital=-100000
    Net income from House property=5000
    Less Max limit under section 80 etc=-100000
    Income from other sources=0.00
    Net Taxable income=0.00+5000-100000
    =-95000
    Now with my little knowledge of IT that any property which is self acquired by individual and is blending it with HUF then any income(section64(2) /Loss(Section 64(1) arising out from HUF will be clubbed with the income of individual blending the property.Now as it clear from my Individual ITR that i have not shown any income from house property but simultaneously shown income from other sources(ie HUF). Although here it is in loss. so
    at the end what i achievd:
    (i) From Sole ownership to Joint ownership
    (ii)Net taxable income got reduced from 405000 to 305000

    This is my thinking i would request mr manish to please comment or offerr their views

  2. Dear Vivek, from the fact given by you, my take –

    1. You are the owner of that IDBI loaned house.
    2. If you want to gift it to your HUF, you can do so but please do note that home loan benefit in that case ‘ll cease to exist for you as you are no more owner of the property. Addition to it, as you have gifted your own property to your HUF, any income (already rental income is there) from that property ‘ll be clubbed with your own income under section 64 for clubbing provisions.
    3. As you were already availing tax benefit on this house from your employer for salary income, it indicates your employer knows the status about you that you are an owner of a house in NCR. After gifting your property to your HUF, how your employer ‘ll treat your status, only your employer can decide not me.

    Just to add – In case you decide to gift the property to your HUF, there are few hurdles in between, you have to take consent of the banker (IDBI in this case) as well as the NOC from the Co-Op. society where the property is situated. Also there ‘ll be property transfer charges to endorse the name of HUF in place of you in Govt. record.

    Please update with your views.

    Thanks

    Ashal

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