Yes, a Hindu Undivided Family (HUF) can purchase property in the name of its Karta, who is the head and manager of the HUF. However, the property so purchased will belong to the HUF and not to the Karta individually.
The Karta merely represents the family, and the property is treated as HUF property, even if the sale deed is executed in the Karta’s name. It is essential that the payment for such property comes from the HUF’s common funds and not from the Karta’s personal income, otherwise the property may be treated as his individual asset.
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Recently, I came across a query about can HUF purchase property in the name of karta. While a Hindu Undivided Family (HUF) is recognised as a separate taxable entity for income tax purposes, it is not a separate legal person under Hindu law. So, yes, HUF can purchase a property in the name of Karta.
Can HUF Buy a House Property in the Name of Karta?
Yes. HUF cannot hold or acquire property in its own name in the direct sense. Instead, property intended for the HUF may legally be purchased in the name of a member, typically the Karta, as a fiduciary holder essentially acting on behalf of the HUF.
Crucially, the Income Tax Act allows such arrangements without denying tax benefits.
For instance, the ITAT ruled in Puranchand & Family (HUF) vs ITO that the exemption under Section 54F cannot be denied simply because the new property was acquired in the name of a coparcener instead of the HUF itself.
This is rooted in the principle that an HUF cannot hold property in its own name under Hindu law, and using the Karta or a coparcener as a title-holder does not undermine the entitlement to the exemption.
Therefore, while the legal title may rest with the Karta or a member, the beneficial ownership is effectively with the HUF, ensuring that tax exemptions, like Section 54F are not thwarted by technicalities in naming. I hope you found this information useful.
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Can HUF Purchase Property in the Name of Karta?
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2025-08-26T11:38:39+00:00 2025-08-26T11:38:41+00:00Comment
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