Clubbing (huf)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2011 A member of HUF transfers a sum of money from his bank account to the bank account of the HUF.

The HUF deposits the said sum in a fixed deposit.

In whose hands will the interest on such FD be taxable?

Kindly quote relevant provisions/case laws.

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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29 December 2011 Interest is taxable in the hands of a member.
Clubbing provisions gets attracted.

Ref section: 64(2) of Income tax Act.
Income of HUF from property converted by the individual into HUF property.

Income is included in the hands of individual & not in the hands of HUF.

Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2011 Does the word "property" cover cash??

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CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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29 December 2011 yes. cash is also property.

Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2011 Is there any case law regarding this? Any instance where cash is treated as property for the purpose of clubbing?

Querist : Anonymous

Querist : Anonymous (Querist)