Tax Planning for Property

[Neeloy Kumar Bakshi]

Sir/Madam, myself,my wife & HUF(consisting of myself(karta),my wife & daughter) file IT Returns.(1)Our HUF does not own a Residential property.If i purchase a property in the name of HUF with loan from a financial institution,will it be eligible for the same benefits as an individual ie under Section 80C for the principal amount & a deduction of Rs 1.5 Lakh(max) for the interest portion.Is the newly introduced section 80EE applicable to HUF?

(2)My wife has a Residential  property purchased with Bank loan taken 3.5 yrs back.She is claiming tax benefits under Section 80C & on the interest paid on the loan.Now if she wishes to go for Reconstruction of this property with Bank loan,can she claim Depreciation for Reconstruction costs & Tax benefit for the Interest portion of the loan taken for Reconstruction.

[CAGOPALJI AGRAWAL]

HUF is the creation of law and if you purchase the property, it would be joint ownership only and not HUF property.

 

She can not claim depreciation as it is claimed if the property is used for business/profession. Of course she can take the benefit of interest and principal repayment.

[Neeloy Kumar Bakshi]

Sir,

     The property in my wife's name is being used for business purpose only but no depreciation has been claimed.Now if she Reconstructs the property with say 15 lac then can she claim depreciation on the original cost of the house + 15 lac ? Please explain what applies in this case & how do we go about it? Regards.

AI Summary

Tax Benefits for HUF Property: Section 80C & 80EE Explained; Depreciation Claims for Business Property Reconstruction An individual inquired about tax benefits for purchasing property under a Hindu Undivided Family (HUF) and whether Section 80C and 80EE apply. Additionally, they asked if their wife could claim depreciation for reconstructing a property used for business, which was initially purchased with a bank loan. A Chartered Accountant responded that property bought by an HUF would not be considered HUF property and clarified that depreciation is applicable only if the property is used for business. The individual further questioned about claiming depreciation on the original cost plus reconstruction expenses for the business-used property.