Can an HUF buy a house property and take a home loan?

answer: Yes, an HUF can buy and own any number of properties through its Karta. A HUF can have a maximum of two properties as self-occupied property, if these are actually occupied by family members. If the HUF has more than two properties and these are occupied by the members for their use, then the HUF has to treat any two properties as self-occupied and rent the remaining self-occupied properties. shall be deemed to have been taken. and notional rent in respect of such property is to be offered to tax even if no rent is received in respect of such properties. So you can buy any number of properties on behalf of your HUF either for self-business purpose or as an investment.

Like an individual, an HUF can also claim a deduction under section 80C for repayment of home loan up to Rs. 1.50 lakh along with other eligible items. It can also claim deduction under section 24(b) for interest paid on money borrowed for acquisition of house property. The deduction under section 24(b) is limited to Rs. 2 lakh for a maximum of two self-occupied houses taken together. If the property is let out, HUF for amount borrowed during the year subject to restriction on its eligibility for damages under the head “Income from house property” against other heads of income up to two lakhs Can claim deduction for full interest. Unabsorbed loss under house property for the year can be carried forward and set off against house property income in subsequent eight years.

Balwant Jain is a tax and investment specialist and can be reached on Twitter at jainbalwant@gmail.com and @jainbalwant.