Property transfer to director,s HUF in Private company
This query is : Resolved
06 November 2008
Our company wants to transfer a property in the name of the one of the Direcotr' HUF. Accordingly company will charge nominal rent from the director's HUF. On other side HUF will earn Income from the same property.
Can any one explain the implication in Income tax or any other act for the same transaction.
Can any one explain the implication in Income tax or any other act for the same transaction.
06 November 2008
Assuming that the HUF status is accepted by IT authorities, HUF will be assessable for property income depending upon its crossing the non taxable limit.
In the case of company it will have to be assessed for Capital gain.
In the case of company it will have to be assessed for Capital gain.
06 November 2008
thanks Mr. Srinivasaraghavan
But is there any chance that Assessing officer take a view that income has been transfered from company to HUF and if it possible what couse of action A.Officer can take.
Thanks
But is there any chance that Assessing officer take a view that income has been transfered from company to HUF and if it possible what couse of action A.Officer can take.
Thanks
06 November 2008
No. In the case of sale for a full consideration such a presumption is not possible.
06 November 2008
Thanks
06 November 2008
"Accordingly company will charge nominal rent from the director's HUF"
What does it mean? After the transfer, how could the company charge rent on it? Please make ur query clear in this part
What does it mean? After the transfer, how could the company charge rent on it? Please make ur query clear in this part
07 November 2008
Dear Shailash
Sorry There is typing mistake.
The Querry was for renting of property or sale of property. But the answer is for sale of property only.
Please answer if property rented out to HUF what would be the legal implication and assumption of Assessing officer in this regard
Sorry There is typing mistake.
The Querry was for renting of property or sale of property. But the answer is for sale of property only.
Please answer if property rented out to HUF what would be the legal implication and assumption of Assessing officer in this regard
07 November 2008
It depends upon the value of transfer, acceptability of HUF to the satisfaction of the AO etc.,
07 November 2008
While renting to HUF by the company the following points to be considered u/s 40A 2(b)-payment to relatives
we can say judgement of reasonableness of payment
-copy of Rent agreement
-Amt of rent
-Basis of rent (say per sq.ft)
-Market value of rent with proof
we can say judgement of reasonableness of payment
-copy of Rent agreement
-Amt of rent
-Basis of rent (say per sq.ft)
-Market value of rent with proof
08 November 2008
thanks
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