You have perhaps not understood the bank correctly. An HUF never dies. Your husband was the Karta of the HUF and after his demise, your son becomes the Karta. Therefore, the name of the Karta has got to be replaced in the records of the bank.
Once this formality is complete, he can withdraw the entire amount to the credit of the account, leaving the minimum balance required as per the bank rules.
Yes, the HUF account can also be closed after dissolving the HUF. This is a time consuming and tedious process and would require some assistance from a consultant.
It would be a good idea to continue the account because it would become a tax-saving avenue for your family, once your son begins earning.
I would like to get some clarifications regarding gift tax under Sec 56. I have read that gifts if given under a will or by way of inheritance or in contemplation of death of the payer are tax-free.I am 80 years old. I have no close relatives left. I have made a will bequeathing to three friends who are helpful to me sums of Rs 5 lakh or more. I have also bequeathed some money to the executors of my will; for they will have to take time and trouble to settle my estate and give donations to charity, etc. Do the above clauses mean that they will not have to pay any tax, whether they receive the amount by way of cheques, fixed deposit or Government of India (GOI) bonds
Yes, you are right. The relevant clauses of Sec 56 would render these amounts, bequeathed by you, tax-free in the hands of the recipients.
As regards gifts given in contemplation of death, according to Sec 191 of the Indian Succession Act, gifts can be made in contemplation of death by a person who is ill and expects to die shortly and delivers to another the possession of any movable property (not immovable) as a gift in case he or she dies. Such a gift may be revoked by the donor if he or she recovers from the illness.
I am a widow, and I inherited a house from my husband. I want to buy two houses out of the amount incurred as capital gain when I sell the inherited house. Can I purchase two houses by selling my one house to set-off capital gain amount earned out of the sale proceeds of the house
Exemptions from tax on long-term capital gains arising from transfer of a residential house are available u/s 54 (capital gains from sale of a residential house) and 54F (capital gains from any other property) if the assessee purchases or constructs a residential house within stipulated periods. The villain causing the confusion is the article a used before residential house. It seems to imply that the exemption is available only a against purchase of one residential house and not two, or more. In other words, when an assessee invests the capital gains u/s 54 or the net sale proceeds u/s 54F in purchasing or constructing two residential houses, only one of these, as opted for by the assessee, will be allowed for the tax concession.
In the case of Fulwanti C Rathod v ITO, ITAT Mumbai Bench E (ITA 1092/Mum./1995), dt 3.5.02, the learned judge observed, The word a can be equivalent to the word any. Also, as per the General Clauses Act, singular includes plural. The judge referred to the principle of interpretation that when there was a doubt as to its meaning, it had to be understood in the same sense it harmonised with the objective of the enactment. Referring to the Wealth-tax Act and the Estate Duty Act, the words used therein were, one house as against the words a house used in the Income-tax Act.
On the other hand, in the case of Mrs Gulshanbanoo R Mukhi v Joint CIT Appeal #3369 (BOM) of 2000 [AY 96-97] dt 16.1.02 ITD 649 (Mum) ITAT Mumbai Bench C, it was held that a can be any but any cannot be many.
Allahabad High Court in the case of Shiv Narain Chaudhari v CWT (108ITR104) held that if the two flats of the building are situated in same compound and within common boundaries and have unity of structure, then they could be regarded as constituting one house.
It is unfortunate but true that in practice, the department uses the interpretation, which is beneficial to the revenue.
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