Answer

Estate planning · HUF

HUF and LTCG: capital gains planning with HUF

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  1. Facts

    HUF can invest in equity and mutual funds. It gets its own ₹1.25L LTCG exemption on equity (Budget 2024). If you've already used your personal ₹1.25L LTCG exemption, the HUF can harvest another ₹1.25L of gains tax-free, that's ₹2.5L combined LTCG harvesting every year.

  2. Provisions and law

    • Income Tax Act 1961, Sec 45 (now 67) | Sec 54, 54F (now 82, 86) for exemption

  3. Analysis

    HUF can also claim Sec 82, Income-tax Act 2025 (old Sec 54) exemption on property reinvestment, if HUF sells a house and reinvests in another house within 2 years, LTCG is exempt. This doubles the family's Sec 82 (old Sec 54) capacity.

  4. Conclusion

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