Gift by karta of huf to his son

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Nihar (Querist)
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13 December 2013 Sir,

There is a HUF with following members :

1. Father
2. Mother
3. Son
4. Daughter

Can the Karta i.e. Father gift cash to his son / daughter?

If the answere is in affirmative, what are the tax implications to the HUF and the Son.

Presume that both the HUF and the Son are having income in excess of the basic exemption limit.

Thanks.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 December 2013 Father can gift his own money to his son/daughter. There is no tax on such gifts from/to relatives.
.

Nihar

Nihar (Querist)
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13 December 2013 Sir,

Thats fine but, can father gift to his son from the properties (assets) of the HUF.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 December 2013 All the members have right on the property of the HUF.
.
So like father/karta the property (assets) belongs to all the members.
.
There is an indirect restriction on gifts to members in the name of "Partial Partition"
under which the income and asset remains with the HUF only -for Income Tax purpose
.
Looking to this, gifts of higher value may
be problematic but Occasional gifts of small value can be given to the members.
.

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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13 December 2013 1. A reasonable amount can be gifted to son/daughter.
.
2. A provision may also be made for the education/marriage of the son/daughter.
.
3. The answer is "affirmative" in all the circumstances described by you in the query.

Nihar

Nihar (Querist)
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13 December 2013 Thank You Sir for such a prompt reply.

Nihar D. Vora

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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13 December 2013 You can refer sec 56(2) in addition to above explanation for exact provision of law.

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