Individual and huf

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2012 If a Individual Gives a Loan to his own HUF than does that HUF needs to pay interest on the loan amount for taxation purpose or we can show it as interest free loan.

Also can Individual Gift sum of rupees to his own HUF and what are the tax implications on it.

Regards.

Thanks

Vivek Mehta (CA, DISA,CS, MBA)

Vivek Mehta (CA, DISA,CS, MBA) (Expert)
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24 August 2012 Yes an individual can give a sum of money as a loan to his HUF and that too interest free...

Prakash Kochar

Prakash Kochar (Expert)
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26 August 2012 Receipt of gift from relatives is exempt from income tax. Finance Act 2012, substituted explanation (e) to sect 56(2)(vii), having retrospective effect from 01.10.2009 which provides that gift received from any relative i.e. member of HUF will be covered as from relative therefore it will not be taxable in the hand of HUF.
Under clubbing provisions sect. 64(2)(b) income arising from amount received as gift otherwise than for adequate consideration from member of HUF, the entire income arising from such converted property will be included in the income of individual member and will be deducted from income of HUF.

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