Huf property

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

29 November 2011 My father is planning to sell an ancestral property for Rs.25 lakhs. Should he sell the same in his personal name since he is the legal heir.Or should he open an HUF and do this transaction over there. What is advisable. If he does it in HUF and how will this money distributable.Like We are two sons and mother. Can we distriubute it equally like 1/4 th each what will be the tax implications. Your best advice over it on this shall be highly appreciable.

CA Hardik Bunha

CA Hardik Bunha (Expert)
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29 November 2011 Yes it is advisible to sell property from HUF. any capital gain generated from it will be exempt in the hands of sons and mother.

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Querist : Anonymous

Querist : Anonymous (Querist)

29 November 2011 Thx. for the immediate reply. But I am still confused with the answer provided. Try to explain it in a layman language.

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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29 November 2011 Assuming that the ancestral Property is the only property which belongs to the HUF of father.
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The four members of this HUF will first effect complete partition of HUF. Thereafter,
there will be no HUF like Father's Original HUF.
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When the property will be sold all the 4 co-owners will be liable for the capital gains. The Tax incidence will reduce substantially.
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Any of the four or all can purchase a new residential house to get exemption from capital gains U/s 54/54F.

Querist : Anonymous

Querist : Anonymous (Querist)

30 November 2011 No this is not the only property.As said in my query its an old ancestral land. After various study and comments from experts on this board. I have decided to sell the property in HUF. Now I would like to know jow get the valuation done for the land in order to determine capital gains.THe property is more than 50 years old. Now been sold for Rs.25 lakhs.Please advice on valuation front.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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30 November 2011 Ultimately its a good and thoughtful decision.

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The valuation can be done from the approved valuers, which may be found in your city itself or inquire about the same with a CA firm.

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Querist : Anonymous

Querist : Anonymous (Querist)

30 November 2011 Anybody in the panel who can help me on the valuation front. The land is located in Rajasthan - Sikar. Please forward me the contact details or email id in regard to it.