If a house-property belonging to an HUF is divided (in 4 portion) and then transferred to Karta and his 3 sons, what will be the tax impact of this transaction in the hands of HUF and each of the co-parcener?viki1102@......com

The house property is a capital asset. Its transfer result in capital gains which is chargeable to tax under the I T Act. However, transfer of assets from HUF to its members is special case . There is express provision under the I T Act which says that the distribution of capital asset on total or partial partition of HUF is not regarded as transfer for the purpose of I T Act. The said provision contained in section 47(i) of the I T Act is as under:

"47. Nothing contained in section 45 shall apply to the following transfers :(i) any distribution of capital assets on the total or partial partition of a Hindu undivided family;"

The partition in Hindu law is effected by a definite and unequivocal indication of a coparcener's intention to separate. Similarly, a partial partition is effected by a definite and unequivocal indication of the coparcener to partition a particular business or property of the joint family leaving the other assets as joint family property. Therefore ,it is very important to understand words"total or partial partition".In that case only, distribution of assets is not regarded as transfer and no capital gains occur in hand of HUF. However , in individual's hand there is no taxable income in any case on transfer of house property from HUF.