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Transfer of self occupied property in HUF property

Rushab Jain (CA Practice ) (83 Points)

10 May 2007

Whether transfer of self occupied property in to joint stock property of HUF is treated as transfer u/s.47?
If no then as per sec.49 for cost of previos owner includes the self occupied property in to joint stock property of HUF.In such case it will result in double taxation. Please clear my point.

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2 Replies

Jai Singh Negi (31 Points)
Replied 11 June 2007

As per section 64(2) if a member of HUF throws its property into the common pool of HUF for no sales consideration the member would still be treated as a deemed owner of the property. Hence such transfer would be considered as a gift given by a member to HUF the reason being member receives no consideration for such transfer. the income from such property would be taxable in the hand of member himself.further section 47 provides that if such property is distributed by HUF in the event of partition among its members it would not be regarded as transfer in the hand of HUF. As and when the member whom such property is distributed sells such distributed property the tax liability which arises as a result of such sale would be borne by the member himself. As per section 49 for the purpose of computation of capital gain the cost of acquisition would be the cost to the member who had actually thrown such property into the common pool.