Can my father’s self-acquired immovable property be transferred to my HUF?

My father, who handed away in 2012, had acquired a residential flat in his title. I’ve no siblings and my father’s mom had handed away in 2011. So my mom and myself solely are the authorized heirs. Can my father’s self-acquired immovable property be transferred to my HUF i.e. son’s HUF? If such a switch of residential flat is finished, then will the rental revenue be taxed within the fingers of the HUF’s or will it’s clubbed with my revenue?

Answer: Since you haven’t talked about whether or not you father had left a legitimate will or not, I presume that he died intestate with out leaving a legitimate Will and subsequently Section 8 learn with schedule of the Hindu Succession Act, 1956 will apply in your case. As mom of your father had handed away earlier than demise of your father and because you don’t have siblings, you and your mom are the one the authorized heirs of the property. So you each have inherited the property equally and turn out to be equal proprietor of your father’s property after his demise. 

So for transferring the property to your HUF each of you’ll have to execute present deed in favour of your HUF. This transaction can have totally different tax implications in respect of your share and share of your mom in it. Since you might be handled as relative of your HUF for revenue tax functions and subsequently the present obtained by your HUF of your share within the property won’t be handled as revenue of the HUF. However, as per the provisions of revenue tax legal guidelines, any revenue arising to the asset transferred by the member to the HUF is topic to clubbing provisions, the rental revenue relatable to your share shall be clubbed together with your revenue.

As far as switch of your mom’s share within the inherited property is worried the market worth of her share will turn out to be taxable within the fingers of the HUF as your mom isn’t a member of your HUF. It is simply the present made by a member to its HUF which isn’t handled as revenue of the HUF. However, the clubbing provisions won’t apply in respect of rental revenue relatable to your mom’s share so transferred.

Balwant Jain is a tax and funding knowledgeable and might be reached on jainbalwant@gmail.com and @jainbalwant on Twitter.

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