Deposit from huf

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Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2013 please guide me will unsecured loan taken from HUF be treated as deposit.

CA.Vinita Gupta

CA.Vinita Gupta (Expert)
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28 October 2013 Unsecured Loan Taken from HUF will be treated as Loan and not Deposit

Ajay Mishra

Ajay Mishra (Expert)
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28 October 2013 Hi

Acceptance of deposit by a private company from HUF:—
(a) If all members of HUF are also the directors of private company, such private company can accept deposits/unsecured loans from HUF. This case will be covered under rule 2(b)(ix) i.e. such a deposit is an exempted deposit.
(b) If all members of HUF are not the directors of a private company i.e. some of them are the partners and remaining are shareholders, still private company can accept unsecured loan/deposit from HUF. This case will be covered under rule 2(b)(ix) i.e. such a deposit is an exempted deposit.
(c) If there are some members of HUF who are not the shareholders of a private company, still private company can accept deposits from HUF. This case will not be covered under rule 2(b)(ix).

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Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2013 Ajay sir

what if it is a public company.
please guide me regarding rule 2(b)(xi)

Ajay Mishra

Ajay Mishra (Expert)
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28 October 2013 It will covered under deposit, because the exemption is provided only to private company and not to public company.

So if you have taken money from HUF then it will be considered as deposit.

Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2013 Ajay Sir

what if a director is a Karta of HUF from whom unsecured loan has been taken.

Ajay Mishra

Ajay Mishra (Expert)
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28 October 2013 If you are taking loan from director and treating him as Karta the Section 58A will apply.

If you taking loan from only director then it will not be treated as normal loan and it will not be treated as deposit.

Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2013 Ajay Sir

an HUF concern is giving a loan as a business associates in a normal course of trade because HUF is a supplier of raw material.

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