Can an HUF buy an immovable property? What are the exemptions accessible to it, if the property is self-occupied by the members of HUF? The karta of HUF is residing along with his household in a house which is within the identify of his spouse and claiming HRA deduction. Now, can he buy one residential property within the identify of HUF for funding goal. What are the exemptions accessible as regards curiosity on home mortgage and principal compensation?
Answer: Yes, an HUF should purchase and personal any variety of properties by way of its Karta. An HUF can have most of two properties as self-occupied properties in case these are literally occupied by the members of the family. In case the HUF owns greater than two properties and these are occupied by the members for his or her use, the HUF has to deal with any two properties as self-occupied and remainder of the self-occupied properties shall be handled as deemed to have been set free and notional lease in respect of such deemed to have been set free properties needs to be supplied for tax even no lease is acquired in respect of such properties. So you may buy any variety of properties on behalf of your HUF both for self-occupation goal or as an funding.
Like an Individual an HUF can even declare deduction for compensation of home mortgage beneath Section 80C upto Rs. 1.50 lakh along with different eligible objects. It can even declare deduction beneath Section 24(b) for curiosity paid on money borrowed to amass the house property. The deduction beneath Section 24(b) is restricted to Rs. 2 lakhs for max of two self-occupied homes taken collectively. If the property is set free the HUF can declare deduction for full curiosity for money borrowed topic to restriction on its eligibility to set off of losses beneath the “Income from House Property” head in opposition to different heads of earnings as much as two lakhs throughout the year. The unabsorbed losses beneath house property for the year might be carried ahead and set off in opposition to house property earnings in subsequent eight years.
Balwant Jain is a tax and funding knowledgeable and can reached on [email protected] and @jainbalwant on Twitter.
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