Gift to huf

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2013 Mr. X HUF has received gift of Rs. 10Lacs from brother of Karta Mr.Y. Now, as per the definiton of HUF, all lineal descendants of Karta would be called the members. Here, gift has been given by brother of Karta, whether it will be taxable? if yes then in whose hands gift will be taxable, Mr. Y or HUF?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

02 January 2014 1. Mr. Y is a member of the HUF and accordingly is a relative of the HUF for the purpose of Section 56(2)9vii).

Therefore, gift received by HUF from Mr. Y is NOT TAXABLE in the hands of the HUF.

2. There is no tax implication in the hands of the donee (the person making the gift). However, clubbing provisions may apply.