Gift to huf

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Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2014 please tell me who can give gift to Hindu Undivided Family (H.U.F)?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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20 July 2014 anyone can give the gift..but only gifts from family shall be exempted.

Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2014 thanks for the reply, but sir i have heard that gift from the members of HUF including karta is not permissible. is it true ?

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Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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25 July 2024 Yes, you are correct that there are specific rules governing who can give gifts to a Hindu Undivided Family (HUF) under Indian tax laws. Here’s an explanation based on the provisions of the Income Tax Act, 1961:

### Who can give gifts to an HUF?

1. **Specified Relatives**:
- Gifts received by an HUF from specified relatives are exempt from income tax under Section 56(2)(x) of the Income Tax Act.
- Specified relatives include:
- Parents
- Siblings
- Spouse
- Lineal descendants (children, grandchildren)
- Lineal ancestors (parents, grandparents)

2. **Others**:
- Gifts received from individuals who are not specified relatives may be taxable in the hands of the HUF unless specifically exempted under other provisions of the Income Tax Act.

### Can members of the HUF (including the Karta) give gifts to the HUF?

- Generally, members of the HUF, including the Karta (the head of the family), cannot give gifts to the HUF for the purpose of tax planning or tax exemptions.
- The Income Tax Act does not allow gifts from the members of the HUF (including the Karta) to the HUF itself to qualify for exemptions under Section 56(2)(x).
- Any income received by the HUF from its members or the Karta, including gifts, may be taxable in the hands of the HUF.

### Exceptions and Considerations:

- **Partition**: During a partition of the HUF, gifts or transfers of assets among the members may occur, but these are treated differently under tax laws.
- **HUF Property**: Once assets are part of the HUF property, any gifts from specified relatives to the HUF are exempt from tax, but gifts from HUF members themselves may not qualify for exemption.

### Conclusion:

- Gifts to an HUF from specified relatives (as defined under the Income Tax Act) are exempt from income tax.
- Gifts from members of the HUF, including the Karta, are generally not eligible for tax exemptions under the provisions relating to gifts to HUFs.
- It’s crucial to consult with a tax advisor or chartered accountant for specific advice tailored to your situation, especially when dealing with gifts to or from an HUF for tax planning purposes.